The Effect of Enterprise Risk Management and Environmental, Social, and Governance Performance on Firm Value (Empirical Study on Publicly Listed Banking Company in Indonesia, Malaysia, Singapore, Thai

Globalization and technology-driven changes in the business landscape demand swift adaptation for competitiveness. Effective Enterprise Risk Management (ERM) is crucial to ensure stability and returns amidst new risks. ASEAN banks demonstrated resilience amid challenges like COVID-19 through enhanced risk practices.<br /> Environmental, Social, and Governance (ESG) factors are gaining ground in banking due to consumer demand, regulations, and investor expectations. ASEAN banks are adopting ESG principles with regulatory backing for transparency. ESG metrics affect investments and financial performance, but results vary across studies. Nonetheless, integrating ESG practices is pivotal for the region`s diverse markets and economic potential.<br /> In conclusion, businesses must adjust to global shifts, underscoring the need for proactive ERM. ASEAN banks` pandemic resilience underscores ERM`s significance. ESG factors also matter, driven by regulations and stakeholder demands, though their financial impact differs. ESG integration remains crucial for ASEAN`s long-term economic success.<br /> This study employs Data Panel Regression Analysis to explore how Enterprise Risk Management and ESG Performance influence Firm Value. The research assesses their impacts individually and together, with firm size and inflation rate as control variables. The sample in this research is the ASEAN banking sector throughout Indonesia, Malaysia, Singapore, Thailand and the Philippines from 2021 to 2022, totaling 29 companies. This study also applies a one-year time lag between the independent and dependent variables. Findings suggest that ERM has an insignificant positive effect on firm value, while ESG Performance significantly and positively affects it. When considered together, ERM and ESG Performance have a positive yet insignificant impact on firm value.

Inggris

Enterprise Risk Management, ESG Performance, Firm Value

Mon Aug 28 2023 15:52:10 GMT+0000 (Coordinated Universal Time)

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