THE EFFECT OF ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) ON CORPORATE PERFORMANCE WITH ENTERPRISE RISK MANAGEMENT (ERM) AS A MEDIATING VARIABLE

Authors

  • Nur Azizah Muhammadiyah University of Gresik, Indonesia
  • Suwarno Suwarno Muhammadiyah University of Gresik, Indonesia

DOI:

https://doi.org/10.29040/ijebar.v9i4.18945

Abstract

This research association the correlation between ESG and corporate performance, with ERM as an intervening variable among manufacturing companies listed on the Indonesia Stock Exchange during the 2022–2024 period. Using a quantitative research design and secondary data obtained from firms’ published reports, the empirical results show that ESG initiatives do not exert a direct impact on firm performance. Moreover, ESG is found to have a negative and statistically significant relationship with ERM, indicating that ESG implementation may function as an alternative mechanism for addressing non-financial risk exposures. The analysis further reveals that ERM neither significantly influences corporate performance nor mediates the relationship between ESG and performance. Interpreted through the lens of stakeholder theory, these results suggest that the performance implications of ESG and ERM are not immediate but are shaped by firm-specific characteristics and contextual conditions. Overall, the findings highlight the inherent complexity of aligning sustainability strategies with risk management practices to enhance firm performance in emerging market settings.

Keywords: ESG, ERM, Corporate Performance, Stakeholder Theory

 

Downloads

Published

2026-01-02

How to Cite

Azizah, N., & Suwarno, S. (2026). THE EFFECT OF ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) ON CORPORATE PERFORMANCE WITH ENTERPRISE RISK MANAGEMENT (ERM) AS A MEDIATING VARIABLE. International Journal of Economics, Business and Accounting Research (IJEBAR), 9(4). https://doi.org/10.29040/ijebar.v9i4.18945

Issue

Vol. 9 No. 4 (2025): IJEBAR, VOL. 09 ISSUE 04, DECEMBER 2025

Section

Articles

Citation Check

License

Authors who publish with IJEBAR agree to the following terms: Authors retain copyright and grant the IJEBAR right of first publication with the work simultaneously licensed under a Creative Commons Attribution License (CC BY-SA 4.0) that allows others to share (copy and redistribute the material in any medium or format) and adapt (remix, transform, and build upon the material) the work for any purpose, even commercially with an acknowledgement of the work's authorship and initial publication in IJEBAR. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in IJEBAR. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).