Analyzing ESG's Role as a Mediator in Corporate Resource Allocation and Financial Outcome

Yayu Putri Senjani, Rosyid Nur Anggara Putra

Abstract


Sustainable finance is a key focus for the Financial Services Authority (OJK) to support a green economy, yet the financial sector's understanding of its role remains limited. This study examines data from 12 companies listed on the SRI KEHATI Index over a 10-year period (2011-2020), analyzing the impact of corporate resource allocation on ESG performance and financial outcomes. The results show that investments in research and development (R&D) and cash flows directed toward investment activities significantly enhance financial performance, while human resource expenditures have no discernible effect. These findings align with the resource-based view, suggesting that innovation and strategic investments are more effective in improving profitability than labor-related costs. Moreover, ESG performance does not mediate the relationship between company resources and profitability, indicating that, for the companies studied, ESG factors have yet to be a significant driver of financial performance, reflecting the financial industry's limited integration of sustainable finance.

Keywords


ESG; Human Resource; R&D; Profitability; Performance; Cashflow

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References


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DOI: https://doi.org/10.15408/akt.v17i2.43996 Abstract - 0 PDF - 0

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