Determinants of Firm Value in ESG-Based Mining and Energy Companies: Evidence from Indonesia

Abstract

This study examines the effect of ESG performance, profitability, and sales growth on firm value in ESG-based mining and energy companies listed on the Indonesia Stock Exchange during 2021–2024. The mining and energy sector represents an environmentally sensitive and high-carbon industry that faces increasing pressure from sustainability issues, energy transition, and post-pandemic market dynamics. However, empirical evidence on ESG-rated mining and energy firms in emerging markets remains limited. Firm value is proxied by price-to-book value, ESG performance is measured using Refinitiv ESG Score, profitability is measured by return on assets, and sales growth is measured by annual sales growth. This study uses a quantitative approach with secondary data obtained from annual reports, sustainability reports, Refinitiv, and Indonesia Stock Exchange publications. The sample consists of 13 companies with 51 firm-year observations selected using purposive sampling. Panel data regression using EViews 13  was applied after model selection and classical assumption testing. The findings show that ESG performance, profitability, and sales growth simultaneously affect firm value. Partially, ESG performance and profitability do not significantly affect firm value, while sales growth has a positive and significant effect. These findings indicate that investors in Indonesia’s mining and energy sector respond more strongly to sales growth as a signal of business prospects than to ESG performance and profitability. This study contributes by providing panel evidence using Refinitiv ESG scores in environmentally sensitive industries within an emerging market context.