ESG disclosure and firm value: The moderating role of female directors in Indonesian listed firms

Abstract

Growing sustainability awareness has encouraged investors to consider environmental, social, and governance (ESG) factors when evaluating firms. However, evidence regarding the relationship between ESG disclosure and firm value remains mixed. This study examines the association between ESG disclosure and firm value and investigates whether female directors moderate this relationship in Indonesia. The study analyzes secondary data from 67 firms listed on the Indonesia Stock Exchange (IDX) over 2015–2024, yielding 670 firm-year observations. Panel data regression using the Random Effects Model was conducted following the Chow, Hausman, and Lagrange Multiplier tests. ESG disclosure is measured using an index based on the Global Reporting Initiative (GRI) Standards, female board representation using the Female Board Ratio (FBR), and firm value using Tobin’s Q. The results indicate that ESG disclosure is not significantly associated with firm value. Female directors exhibit a positive association with firm value when control variables are excluded, but this association becomes insignificant at the 5% level after controls are included. Furthermore, the interaction between ESG disclosure and female board representation is insignificant, a result that remains robust when firm-clustered standard errors are applied. These findings suggest that ESG disclosure alone may not be sufficient to influence firm valuation and that female board representation does not significantly strengthen the relationship between ESG disclosure and firm value.