This study examines whether digital transformation and carbon emissions can be catalysts for ESG performance.The sample comprises 17 manufacturing companies, and a quantitative approach was used by analyzing data from several large manufacturing companies listed on the IDX in 2019 -2023 that have implemented a digital transformation strategy.Our research uses the two-way GMM method with StataMP 17.The results of this study show a significant positive relationship between digital transformation and ESG performance and a significant negative relationship between carbon emissions and ESG performance.By integrating the analysis of digital transformation and carbon emissions, this study offers a new holistic view and provides strategic recommendations for companies to optimize ESG performance amidst the dynamic changing demands of the latest regulations, thus providing empirical guidance for policymakers and management in sustainability efforts.
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Baboe et al. (2025) studied this question.
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