The impact of ESG disclosure and green mining on firm value: evidence from Indonesia
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Published:
Feb 28, 2025
Keywords:
ESG Disclosure, Firm Value, Green Mining, ROA
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Economy
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Abstract
This study examines the impact of Environmental, Social, and Governance (ESG) disclosures and the adoption of green mining practices on the value of mining companies in Indonesia. Using a quantitative research method, we analyze panel data from 20 mining companies listed on the Indonesia Stock Exchange (IDX) over the period from 2020 to 2022. The study estimates the relationships between ESG, green mining, and firm value through panel data regression, applying a fixed effects approach. The results show that neither ESG disclosures nor green mining significantly affects firm value, as measured by Tobin's Q. In contrast, firm size negatively impacts value, while ROA has a positive influence. These findings suggest that investors tend to prioritize traditional financial indicators over sustainability factors when evaluating mining companies. The theoretical implications of this study highlight that, although ESG and green mining are conceptually important, their current levels of implementation are insufficient to meaningfully affect market valuations. Practically, mining companies need to improve the transparency and effectiveness of their ESG reporting and strengthen their sustainability strategies to create additional value for investors and other stakeholders
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Budi Suharto, R. S., Sanga, M. H. ., Situmorang, R. . and Handa, R. P. . (2025) “The impact of ESG disclosure and green mining on firm value: evidence from Indonesia”, Jurnal Mantik, 8(4), pp. 1753-1761. Available at: https://www.iocscience.org/ejournal/index.php/mantik/article/view/6094 (Accessed: 2May2026).
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Servaes, H., & Tamayo, A. (2017). The role of social capital in corporations: A review. Oxford Review of Economic Policy, 33(2). https://doi.org/10.1093/oxrep/grx026
Shang, D., Yin, G., Li, X., Li, Y., Jiang, C., Kang, X., Liu, C., & Zhang, C. (2015). Analysis for Green Mine (phosphate) performance of China: An evaluation index system. Resources Policy, 46. https://doi.org/10.1016/j.resourpol.2015.08.005
Shi, Z. (2015). Green mining technology of mining in China. Electronic Journal of Geotechnical Engineering, 20(17).
Situmorang, R., & Sanga, M. H. (2023). Analisis Laporan Keuangan PT Delta Djakarta. Bisman - Jurnal Bisnis Dan Manajemen, 8(2), 1–11. https://doi.org/10.32511/bisman.v2i2.56
Srivani Maddala, V. K., Sharma, S., Chohan, J., Kumar, R., & Singh, S. (2021). Green mining techniques to curb environmental problems - A review. IOP Conference Series: Earth and Environmental Science, 889(1). https://doi.org/10.1088/1755-1315/889/1/012026
Tang, Y., & Yang, S. (2024). Mineral resource sustainability in the face of the resource exploitation and green recovery: Challenges and solutions. Resources Policy, 88. https://doi.org/10.1016/j.resourpol.2023.104535
Yaya, R., Wibowo, S. A., Ulfaturrahmah, & Jalaludin, D. (2018). Environmental disclosure practices after mandatory disclosure policy in Indonesia. Journal of Business and Retail Management Research, 12(4). https://doi.org/10.24052/jbrmr/v12is04/art-09
Zhou, Y., Zhou, W., Lu, X., Jiskani, I. M., Cai, Q., Liu, P., & Li, L. (2020). Evaluation Index System of Green Surface Mining in China. Mining, Metallurgy and Exploration, 37(4). https://doi.org/10.1007/s42461-020-00236-3
Benjamin, S. J., & Biswas, P. K. (2022). Does winning a CSR Award increase firm value? International Journal of Disclosure and Governance, 19(3). https://doi.org/10.1057/s41310-022-00142-8
Boako, G., Alagidede, I. P., Sjo, B., & Uddin, G. S. (2020). Commodities price cycles and their interdependence with equity markets. Energy Economics, 91. https://doi.org/10.1016/j.eneco.2020.104884
Buchanan, B., Cao, C. X., & Chen, C. (2018). Corporate social responsibility, firm value, and influential institutional ownership. Journal of Corporate Finance, 52. https://doi.org/10.1016/j.jcorpfin.2018.07.004
Cranford, R. (2023). Conceptual application of digital twins to meet ESG targets in the mining industry. Frontiers in Industrial Engineering, 1. https://doi.org/10.3389/fieng.2023.1223989
De Vegvar, A. (2024). Performance of the Energy and Mining Industries Performance of the Energy and Mining Industries [Claremont McKenna College]. https://doi.org/https://scholarship.claremont.edu/cmc_theses/3450
Duho, K. C. T. (2023). Environmental Reporting, Corporate Governance, and Sustainable Development in Africa’s Mining Sector. https://doi.org/10.1007/978-3-030-91260-4_21-1
Fu, C., Yu, C., Guo, M., & Zhang, L. (2024). ESG rating and financial risk of mining industry companies. Resources Policy, 88. https://doi.org/10.1016/j.resourpol.2023.104308
Ghitti, M., Gianfrate, G., & Palma, L. (2024). The agency of greenwashing. Journal of Management and Governance, 28(3). https://doi.org/10.1007/s10997-023-09683-8
Husnah, & Fahlevi, M. (2023). How do corporate social responsibility and sustainable development goals shape financial performance in Indonesia’s mining industry? Uncertain Supply Chain Management, 11(3). https://doi.org/10.5267/j.uscm.2023.5.099
Jamin, M., Jaelani, A. K., Mulyanto, Kusumaningtyas, R. O., & Ly, D. Q. (2023). The Impact of Indonesia’s Mining Industry Regulation on the Protection of Indigenous Peoples. Hasanuddin Law Review, 9(1). https://doi.org/10.20956/halrev.v9i1.4033
Jankalová, M., & Kurotová, J. (2020). Sustainability assessment using economic value added. Sustainability (Switzerland), 12(1). https://doi.org/10.3390/su12010318
Li, W., Li, W., Seppänen, V., & Koivumäki, T. (2023). Effects of greenwashing on financial performance: Moderation through local environmental regulation and media coverage. Business Strategy and the Environment, 32(1). https://doi.org/10.1002/bse.3177
Marimuthu, R., Sankaranarayanan, B., Ali, S. M., & Karuppiah, K. (2022). Green recovery strategies for the mining industry of India: lessons learned from the COVID-19 pandemic. Journal of Asia Business Studies, 16(3). https://doi.org/10.1108/JABS-05-2021-0179
Parameswar, N., Hasan, Z., Shri, C., & Saini, N. (2023). Exploring the barriers to ESG adoption using modified TISM approach. Kybernetes. https://doi.org/10.1108/K-05-2023-0888
Qi, R., Liu, T., Jia, Q., Sun, L., & Liu, J. (2019). Simulating the sustainable effect of green mining construction policies on coal mining industry of China. Journal of Cleaner Production, 226. https://doi.org/10.1016/j.jclepro.2019.04.028
Saepudin, A., Rachmawati, I., Kuncoro, H. R., & Angretnowati, Y. (2022). Indonesia Green Mining Industry. European Journal of Development Studies, 2(5). https://doi.org/10.24018/ejdevelop.2022.2.5.169
Sanga, M. H. (2024). The Role of EVA in Enhancing Corporate Value and Sustainability: a Case Study Approach. Artokulo: Journal of Accounting, Economic and Management, 1(1). https://ejournal.mediakunkun.com/index.php/artokulo?91
Sanga, M. H., & Situmorang, R. (2024). The Future of Valuation: Combining ESG impact with EVA Methodology for Corporate’s Value. International Journal of Novel Research (IJNRD), 9(5), 274–277. www.ijnrd.org
Sanga, M. H., Situmorang, R., Benu, Y. S. I. P., Tuka, T. J., & Prince, N. S. (2024). ESG Risk Ratings, Financial Performance and Corporate Value: The Case of The Indonesia Stock Exchange. Jurnal Ekonomi, 13(4), 1370–1379. https://doi.org/10.54209/ekonomi.v13i04
Sanga, M. H., Situmorang, R., Seik, M. F., Bangngu, S. A., & Taus, S. P. W. (2025). The Effect of Liquidity on the Financial Performance of Companies in the Property, Real Estate and Building Construction Sectors Listed on the Indonesia Stock Exchange in 2023. Science Get Journal, 2(1), 1–8. https://doi.org/10.69855/science.v2i1.97
Santos, C., Coelho, A., & Marques, A. (2024). A systematic literature review on greenwashing and its relationship to stakeholders: state of art and future research agenda. Management Review Quarterly, 74(3). https://doi.org/10.1007/s11301-023-00337-5
Servaes, H., & Tamayo, A. (2017). The role of social capital in corporations: A review. Oxford Review of Economic Policy, 33(2). https://doi.org/10.1093/oxrep/grx026
Shang, D., Yin, G., Li, X., Li, Y., Jiang, C., Kang, X., Liu, C., & Zhang, C. (2015). Analysis for Green Mine (phosphate) performance of China: An evaluation index system. Resources Policy, 46. https://doi.org/10.1016/j.resourpol.2015.08.005
Shi, Z. (2015). Green mining technology of mining in China. Electronic Journal of Geotechnical Engineering, 20(17).
Situmorang, R., & Sanga, M. H. (2023). Analisis Laporan Keuangan PT Delta Djakarta. Bisman - Jurnal Bisnis Dan Manajemen, 8(2), 1–11. https://doi.org/10.32511/bisman.v2i2.56
Srivani Maddala, V. K., Sharma, S., Chohan, J., Kumar, R., & Singh, S. (2021). Green mining techniques to curb environmental problems - A review. IOP Conference Series: Earth and Environmental Science, 889(1). https://doi.org/10.1088/1755-1315/889/1/012026
Tang, Y., & Yang, S. (2024). Mineral resource sustainability in the face of the resource exploitation and green recovery: Challenges and solutions. Resources Policy, 88. https://doi.org/10.1016/j.resourpol.2023.104535
Yaya, R., Wibowo, S. A., Ulfaturrahmah, & Jalaludin, D. (2018). Environmental disclosure practices after mandatory disclosure policy in Indonesia. Journal of Business and Retail Management Research, 12(4). https://doi.org/10.24052/jbrmr/v12is04/art-09
Zhou, Y., Zhou, W., Lu, X., Jiskani, I. M., Cai, Q., Liu, P., & Li, L. (2020). Evaluation Index System of Green Surface Mining in China. Mining, Metallurgy and Exploration, 37(4). https://doi.org/10.1007/s42461-020-00236-3
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