Maqasid Al-Shariah Commitments Under Crisis and ESG Performance in Indonesia’s Islamic Capital Market
Abstract
This study examines whether immediate-protection and longer-horizon employee and family-welfare commitments contribute differently to corporate environmental, social, and governance (ESG) performance during a systemic crisis. This study adopts a quantitative explanatory longitudinal design using Panel data combine cross-sectional and temporal information, permit the estimation of within-firm change, and allow time-invariant unobserved firm characteristics. The study uses an unbalanced panel of 84 non-financial companies included in Indonesia’s List of Sharia Securities from 2015 to 2024 which comprising 593 firm-year observations. Results show that PL is positively associated with overall ESG, Environmental, and Social performance outside the COVID-coded period, but none of the PL-COVID interactions is significant. This results implied that the PL-ESG slope therefore does not change detectably during the crisis. PLA is positively associated with all four outcomes outside the COVID-coded period, while its COVID interactions are consistently negative and significant in the primary and firm-clustered specifications. Theoretically, the findings qualify an additive view of Maqasid-oriented responsibility, whereby essential, immediate harm-prevention practices are more crisis-resilient than recurring, longer-horizon welfare commitments, and visible ESG improvement can coexist with a weaker substantive contribution from employee and family-welfare practices. Practically, firms should protect safety and environmental systems while ring-fencing multi-year funding, responsibility, and continuity indicators for pensions, maternity support, insurance, inclusion, and community welfare. Regulators, rating providers, and investors should evaluate aggregate ESG scores together with dimension-specific and workforce indicators. The study contributes by separating crisis-related level changes from slope moderation and by identifying which Maqasid domain is most vulnerable to systemic disruption.