The Effects of Environmental, Social, and Governance Disclosure and Enterprise Risk Management on Firm Value, With Firm Size as a Moderating Variable: A Case Study of Companies in the Energy Sector in Indonesia

Abstract

This research examined the effects of Environmental, Social, and Governance (ESG) Disclosure and Enterprise Risk Management (ERM) on firm value, as well as the moderating role of firm size among energy-sector companies listed on the Indonesia Stock Exchange (IDX) during the 2021–2025 period. Using a quantitative explanatory design, secondary data were obtained from annual reports, sustainability reports, financial statements, IDX records, and company websites. Purposive sampling was used to select 22 companies, resulting in 110 firm-year observations. Firm value was measured using Price-to-Book Value (PBV), ESG Disclosure was measured using an 80-item index based on the Global Reporting Initiative (GRI) framework, ERM was measured using a 20-principle index based on the COSO Enterprise Risk Management framework, and firm size was measured using the natural logarithm of total assets. Return on Assets (ROA), leverage, and company growth were included as control variables. Panel data regression and Moderated Regression Analysis (MRA) were conducted using EViews 9, with the Fixed Effects Model selected as the appropriate estimation model. The results showed that ESG Disclosure (t = 3.087; p = 0.0027) and ERM (t = 3.166; p = 0.0022) had positive and significant effects on firm value. Firm size strengthened the relationship between ESG Disclosure and firm value at the 10% significance level (t = 1.841; p = 0.0693), but it did not moderate the relationship between ERM and firm value (t = −0.708; p = 0.4809). These findings demonstrate that sustainability transparency and integrated risk management contribute to enhancing firm value, while firm size selectively strengthens the value relevance of ESG disclosure.