The Effect of ESG and Corporate Social Responsibility Disclosure on Firm Value with Good Corporate Governance Moderation

Abstract

Islamic banking requires disclosures that reflect both sustainability and Sharia principles. This study examines the effect of ESG and CSR disclosure on firm value, with good corporate governance as a moderating variable, in 14 Islamic commercial banks in Indonesia from 2020 to 2024. The analytical method used is panel data regression with the Random Effect Model approach and Moderated Regression Analysis on 65 observations. The results show that ESG and good corporate governance have no significant direct effect on firm value, while CSR has a positive and significant effect. The moderation test shows that good corporate governance has not been proven to strengthen the influence of ESG or CSR on firm value. This finding indicates that the firm value of Islamic commercial banks is more influenced by specific social responsibility disclosures that reflect the social characteristics of Islamic banking, such as zakat, qardhul hasan, and ZISWAF, compared to more general ESG. This indicates that investors in Islamic bank stocks tend to place a higher value on social responsibility information that aligns with Sharia identity and principles, compared to sustainability information that is conventional and not specific to the institutional context of Islamic banks.