OFF-BUDGET FINANCING, CENTRAL BANK MANDATES, AND LONG-TERM INVESTMENT MOBILIZATION IN INDONESIA

Abstract

In recent years, the increasing emphasis on environmental, social, and governance (ESG) issues has transformed the way companies communicate their performance and long-term sustainability. This study aims to examine the impact of ESG disclosure and sustainability accounting practices on firm value in the context of Indonesian listed companies. By integrating the concept of transparency and stakeholder trust, this research explores whether more comprehensive ESG reporting contributes to enhanced market valuation and investor confidence. This study employs a quantitative research approach using secondary data collected from annual reports and sustainability reports of publicly listed companies in Indonesia. ESG disclosure is measured using a disclosure index based on widely recognized reporting standards, while sustainability accounting practices are proxied through the extent of environmental and social cost recognition. Firm value is measured using indicators such as Tobin’s Q and market-to-book ratio. The data are analyzed using multiple regression techniques to assess the relationship between variables. The findings are expected to demonstrate that higher levels of ESG disclosure and more robust sustainability accounting practices positively influence firm value. Companies that provide transparent and comprehensive ESG information are more likely to gain investor trust, reduce information asymmetry, and strengthen their reputation in the capital market. Furthermore, sustainability accounting practices are anticipated to reinforce the credibility of ESG disclosures by providing measurable and accountable financial information related to sustainability activities. This research contributes to the growing body of literature on sustainability reporting and corporate value, particularly in emerging markets like Indonesia. It also provides practical implications for corporate managers, regulators, and investors by highlighting the importance of integrating ESG considerations into financial reporting frameworks. Ultimately, this study underscores the role of transparency in building trust, which in turn enhances firm value and supports sustainable economic development.