Analysis of Empirical Study on the Impact of Esg Risk Score and Dividend Payout Ratio on Issuer Valuation
Keywords:
ESG Risk Score, Dividend Payout Ratio, Tobins Q ratio, Indonesia Roadmap Shariah Capital Market, Sustainability Development Goals.
Abstract
This study investigates the influence of ESG Risk Score (ESGR) and Dividend Payout Ratio (DPR) on the valuation of companies listed on the Indonesia Stock Exchange (IDX) that have consistently received ESG Risk Ratings from 2019-2022 by Morningstar Sustainalytics. Sustainability Financial & ESG are being the main activities for development of the Sharia capital market and achieving the Sustainability Development Goals (SDGs). The research method is descriptive and verification research through purposive sampling of 53 companies that implemented early regulations related to Sustainable Finance. This study identifies ESGR and DPR as factors influencing valuation. The results show that neither ESGR nor DPR affect company valuation. The variable simultaneously test results indicate no collective impact on company valuation. The conclusion is that ESGR and DPR have not impacted valuation and shown that the implementation of ESG in Indonesia still on the early stages that have a lot potential for development (i.e literacy, information technology, infrastructure and regulations for implementation of ESG program).
References
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www.blueprint.unpri.org@PRI_News-#PRIBlueprint
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Sekaran, U., & Bougie, R. (2016). Research Methods for Business : A Skill-Building Approach (7th ed.).
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S&P Global. (2024). S&P Global Media & Stakeholder Analysis Methodology.
Sudiyatno, B., & Puspitasari, E. (2010). Tobin’s Q Dan Altman Z-Score Sebagai Indikator Pengukuran Kinerja Perusahaan. Kajian Akuntansi, 2, 9–21.
Sustainalytics. (2021). ESG Risk Ratings - Methodology Abstract (2nd ed.).
Triyuwono, I. (2015). Akuntansi Syariah: Perspektif, Metodologi, dan Teori (Vol. 4). PT RajaGrafindo Persada.
Ademi, B., & Klungseth, N. J. (2022). Does it pay to deliver superior ESG performance? Evidence from US S&P 500 companies. Journal of Global Responsibility, 13(4), 421–449. https://doi.org/10.1108/JGR-01-2022-0006
Brigham, E. F., & Ehrhardt, M. C. (2017). Financial Management Theory & Practice (pp. 620–621).
Bursa Efek Indonesia. (2024). Apa itu ESG. Bursa Efek Indonesia. https://esg.idx.co.id/what-is-esg.
Carolin Simorangkir, R. T. M. (2020). The Effect of Devidend Payout Ratio, Assets Growth on Corporate Value with Debt to Equity Ratio as Moderating Variable (Empirical Study on Manufacturing Company Consumer Goods Industry Sectors listed in Indonesia Stock Exchange 2015-2018). Saudi Journal of Business and Management Studies, 5(8), 455–465. https://doi.org/10.36348/sjbms.2020.v05i08.001
Chouaibi, S., Chouaibi, J., & Rossi, M. (2022). ESG and corporate financial performance: the mediating role of green innovation: UK common law versus Germany civil law. EuroMed Journal of Business, 17(1), 46–71. https://doi.org/10.1108/EMJB-09-2020-0101
Creswell, J. W., & Creswell, J. D. (2018). Research Design: Qualitative, Quantitative, and Mixed Methods Approaches (5th ed.).
Dan, A., & Tiron-Tudor, A. (2021). The Determinants of Green Bond Issuance in the European Union. Journal of Risk and Financial Management, 14(9), 446. https://doi.org/10.3390/jrfm14090446
de Villiers, C., La Torre, M., & Molinari, M. (2022). The Global Reporting Initiative’s (GRI) past, present and future: critical reflections and a research agenda on sustainability reporting (standard-setting).
Pacific Accounting Review, 34(5), 728–747. https://doi.org/10.1108/PAR-02-2022-0034
Eccles, R. G., Ioannou, I., & Serafeim, G. (2014). The Impact of Corporate Sustainability on Organizational Processes and Performance. Management Science, 60(11), 2835–2857.
Gholami, A., Sands, J., & Shams, S. (2022). Corporates’ sustainability disclosures impact on cost of capital and idiosyncratic risk. Meditari Accountancy Research. https://doi.org/10.1108/MEDAR-06- 2020-0926
Haji Wahab, M. Z., & Mohamed Naim, A. (2022). Developing Islamic sustainable and responsible investment criteria: an overview. International Journal of Ethics and Systems. https://doi.org/10.1108/IJOES-06-2021-0120
Higgins, R. C., Koski, J. L., & Mitton, T. (2023). Analysis for Financial Management (Vol. 13).
Kasmir. (2017). Analisis Laporan Keuangan. Rajagrafindo Persada.
Kementerian Perencanaan Pembangunan Nasional Republik Indonesia/Badan Perencanaan Pembangunan Nasional. (n.d.). Pedoman Teknis Penyusunan Rencana Aksi Tujuan Pembangunan Berkelanjutan (Tpb)/ Sustainable Development Goals (SDGs).
Krosinsky, C., & Robins, N. (2018). Sustainable Investing: The Art of Long-Term Performance (C. Krosinsky & N. Robins, Eds.). Routledge.
Manacorda, S., & Centonze, F. (2021). Corporate Compliance on a Global Scale: Legitimacy and Effectiveness. In Corporate Compliance on a Global Scale: Legitimacy and Effectiveness. Springer International Publishing. https://doi.org/10.1007/978-3-030-81655-1
Morningstar. (2023). The Morningstar Sustainable Investing Handbook.
Musari, K. (2022). Integrating Green Sukuk and Cash Waqf Linked Sukuk, the Blended Islamic Finance of Fiscal Instrument in Indonesia: A Proposed Model for Fighting Climate Change. International Journal of Islamic Khazanah, 12(2), 133–144. https://doi.org/10.15575/ijik.v12i2.17750
Odum, A. N., Odum, C. G., Omeziri, R. I., & Egbunike, C. F. (2019). Impact of Dividend Payout Ratio on the Value of Firm: A Study of Companies Listed on the Nigerian Stock Exchange. Indonesian Journal of Contemporary Management Research, 1(1), 25–34.
Oji, G. U., & Andrew, A. (2021). The Estimated Effect Of Dividend Policy On Tobin’s Q Value: A Panel Data Evidence From Nigeria Quoted Firms. In | African Journal of Business and Economic Development | (Vol. 1, Issue 10). www.ijaar.orgwww.ijaar.org
Otoritas Jasa Keuangan. (2017). Peraturan Otoritas Jasa Keuangan Nomor 51/POJK.03/2017 tentang Penerapan Keuangan Berkelanjutan bagi Lembaga Jasa Keuangan, Emiten, dan Perusahaan Publik (pp. 1–15). Otoritas Jasa Keuangan.
Otoritas Jasa Keuangan. (2020). Roadmap Pasar Modal Syariah 2020-2024. In Otoritas Jasa Keuangan. https://ojk.go.id/id/berita-dan-kegiatan/publikasi/Documents/Pages/Roadmap-Pasar-Modal-Syariah- 2020---2024/Roadmap Pasar Modal Syariah 2020 - 2024.pdf
Principles for Responsible Investment. (2017). A Blueprint For Responsible Investment Responsible Investors Sustainable Markets A Prosperous World For All.
www.blueprint.unpri.org@PRI_News-#PRIBlueprint
Rastogi, S., & Singh, K. (2022). The impact of ESG on the bank valuation: evidence of moderation by ICT. Journal of Global Responsibility. https://doi.org/10.1108/JGR-07-2022-0075
Rehman, O. U. (2016). Impact of Capital Structure and Dividend Policy on Firm Value. In An International Peer-reviewed Journal (Vol. 21). www.iiste.org
Sekaran, U., & Bougie, R. (2016). Research Methods for Business : A Skill-Building Approach (7th ed.).
Singhania, M., & Saini, N. (2022). Quantification of ESG Regulations: A Cross-Country Benchmarking Analysis. In Vision (Vol. 26, Issue 2, pp. 163–171). Sage Publications India Pvt. Ltd. https://doi.org/10.1177/09722629211054173
S&P Global. (2024). S&P Global Media & Stakeholder Analysis Methodology.
Sudiyatno, B., & Puspitasari, E. (2010). Tobin’s Q Dan Altman Z-Score Sebagai Indikator Pengukuran Kinerja Perusahaan. Kajian Akuntansi, 2, 9–21.
Sustainalytics. (2021). ESG Risk Ratings - Methodology Abstract (2nd ed.).
Triyuwono, I. (2015). Akuntansi Syariah: Perspektif, Metodologi, dan Teori (Vol. 4). PT RajaGrafindo Persada.
Published
2024-11-30
How to Cite
Ramadhan, B., Rosdini, D., & Yuliafitri, I. (2024). Analysis of Empirical Study on the Impact of Esg Risk Score and Dividend Payout Ratio on Issuer Valuation. LAA MAISYIR : Jurnal Ekonomi Islam, 1(1), 43-61. https://doi.org/10.24252/lamaisyir.v1i1.52920
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