EVALUATING E/S/G INDICATORS AND FINANCIAL PERFORMANCE: AN EMPIRICAL ANALYSIS OF NYSE-LISTED ENERGY COMPANIES

Reza, Naomi (2025) EVALUATING E/S/G INDICATORS AND FINANCIAL PERFORMANCE: AN EMPIRICAL ANALYSIS OF NYSE-LISTED ENERGY COMPANIES. Tugas Akhir (S1) - thesis, Universitas Bakrie.

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Abstract

his study examines the associations between Environmental, Social, and Governance (ESG) indicators and financial outcomes for NYSE-listed energy companies observed in 2024. Using a cross-sectional sample of 56 firms and Partial Least Squares Structural Equation Modeling (PLS-SEM) with 5,000 bootstrap resamples, the analysis evaluates links from ESG dimensions, Leverage, and Efficiency to Profitability (Return on Assets) and Firm Valuation (Price-to-Book). Results indicate that the Environmental score is negatively and significantly associated with both Profitability and Firm Valuation, Leverage is negatively and significantly associated with Profitability, and Profitability is positively and significantly associated with Firm Valuation. Other paths are not statistically significant in this specification. The model explains 45.2 percent of the variance in Profitability and 58.3 percent in Firm Valuation. Predictive relevance statistics (Q²) are negative for both endogenous constructs, indicating explanatory rather than predictive utility. Interpretation is bounded by scope. The Environmental score in this study reflects environmental risk exposure; higher values indicate higher risk. Observed negative associations are short-run relationships in the 2024 cross-section and likely reflect transition and compliance costs recorded in the period. These findings do not imply that environmental initiatives reduce value in general, nor should they be interpreted as justification to lessen environmental, social, or governance practices. Many benefits of ESG investment can materialize over multi-year horizons that are not captured in this design. The study highlights the near-term financial profile facing energy firms and underscores the importance of managing environmental risk and capital structure while sustaining profitability to support market valuation.

Item Type:	Thesis (Tugas Akhir (S1) - )
Uncontrolled Keywords:	Environmental, Social, Governance (ESG), leverage, efficiency, profitability, firm valuation, SEM-PLS, NYSE energy sector
Subjects:	Management > Company Sustainability Finance > Finance Management > Corporation Finance Thesis > Thesis (S1)
Divisions:	Fakultas Ekonomi dan Ilmu Sosial > Program Studi Manajemen
Depositing User:	Naomi Reza
Date Deposited:	11 Sep 2025 06:36
Last Modified:	11 Sep 2025 06:36
URI:	https://repository.bakrie.ac.id/id/eprint/12329

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