Jakman

Article Details

Vol. 7 No. 4 (2026): September

Articles

Environmental, Social and Governance Performance, Asset Turnover and Firm Performance: Evidence from Indonesia

Y Yulfiswandi Yulfiswandi G Gizella Gizella I Isnaini Nuzula Agustin T Tony Chandra
10 September 2026 Vol. 7 No. 4 (2026): September https://doi.org/10.35912/jakman.v7.n4.p475-496.2026
Abstract
10 Sep 2026

Purpose: This study examines whether Environmental, Social, and Governance (ESG) performance improves firm performance and investigates the mediating role of asset turnover in explaining how ESG initiatives contribute to financial outcomes among Indonesian listed firms based on stakeholder theory and the resource-based view.
Research Methodology: Using secondary panel data from 96 publicly listed firms with 674 firm-year observations during 2009–2023, this study employs two-way fixed effects regression and mediation analysis. ESG data were obtained from Refinitiv, while financial data were collected from Worldscope.
Results: The findings show that ESG performance has a positive and significant effect on future Return on Assets (ROA). The mediation analysis indicates that asset turnover acts as a key mechanism linking ESG performance to profitability by improving operational efficiency. The positive impact of ESG is more pronounced among larger firms and firms with lower leverage.
Conclusions: ESG engagement represents a value-enhancing strategy rather than a financial burden. Firms implementing stronger ESG practices can achieve better financial outcomes through improved operational efficiency and resource utilization.
Limitations: This study is limited to Indonesian publicly listed firms and primarily relies on ROA and Refinitiv ESG scores as indicators of financial performance and sustainability practices.
Contributions: This study contributes to the ESG literature by identifying asset turnover as an important operational pathway through which ESG performance enhances profitability. The findings provide empirical evidence from Indonesia and support the development of sustainable business strategies that improve competitiveness, transparency, and long-term corporate value.

Keywords: Asset Turnover ESG Performance Firm Performance Indonesia
How to Cite
“
Yulfiswandi, Y., Gizella, G., Agustin, I. N., & Chandra, T. (2026). Environmental, Social and Governance Performance, Asset Turnover and Firm Performance: Evidence from Indonesia. Jurnal Akuntansi, Keuangan, Dan Manajemen, 7(4), 475–496. https://doi.org/10.35912/jakman.v7.n4.p475-496.2026
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