The Effect of ESG Disclosure on Company Value with Profitability as a Mediating Variable

Abstract

This study aims to analyze the influence of ESG disclosure on company value by mediating
profitability in banking finance companies listed on the Indonesia Stock Exchange in 2022-
2024. This research method uses a quantitative approach with multiple linear regression
analysis on 42 samples selected through purposive sampling. ESG disclosures are measured
based on the percentage of disclosure items using dummy item variables that have been met,
company value is measured using Tobin's Q and profitability is measured using Return on
Equity (ROE). The findings show that ESG disclosures have an effect on company value and
profitability. In addition, profitability affects the value of the company. However, profitability
cannot mediate the influence of ESG disclosures on company value. These findings suggest
that in banking companies the benefits of ESG disclosure will be seen in the long term while
profitability tends to reflect short-term performance so profitability mediation does not occur.