“Comprehensive ESG disclosures positively influence market reactions, with environmental, social, and governance factors each contributing significantly to investor sentiment”, according to a study of listed Indonesian companies published in Discover Sustainability.
The study – conducted by Iskandar Itan, Sylvia Sylvia and Sheila Septiany of Universitas Internasional Batamand and Robin Chen of National Taipei University – assessed the change in average stock price of 64 companies listed on the Indonesia Stock Exchange following the release of their ESG reports between 2019 and 2022.
It found that greater transparency on environmental, social and governance topics all resulted in positive market reactions
“Moreover, family-owned and foreign-owned companies experience notably higher market reactions to ESG disclosures than non-family-owned and non-foreign-owned companies, suggesting that ownership type enhances investor confidence in ESG practices,” the study reads.
