Do Corporate Governance and Ownership Structure Influence Environmental, Social, and Governance (ESG) Decoupling? Evidence from Indonesian Energy Companies

Abstract

This study examines the effects of independent commissioners, board gender diversity, and institutional ownership on ESG decoupling among energy sector firms listed on the Indonesia Stock Exchange from 2020 to 2024. Data were collected from annual reports, sustainability reports, Bloomberg ESG disclosure scores, and Refinitiv ESG performance scores. Purposive sampling was used to select the firms, resulting in a dataset of 18 firms and 90 observations. Panel data regression was employed using the Random Effect Model (REM), estimated using Generalized Least Squares (GLS) in EViews 13. The results indicate a positive and statistically significant effect of board gender diversity on ESG decoupling. However, independent commissioners and institutional ownership do not have significant effects on ESG decoupling. The Debt to Equity Ratio (DER) has a significant negative effect, whereas Return on Assets (ROA) and firm size do not have significant effects. Overall, the findings indicate that the examined corporate governance and ownership structure variables have different effects on ESG decoupling.