Assessing the Impact of Financial Risk and Ownership Structure on ESG Disclosure: Insights from the Energy Sector in Indonesia

Purpose - This study aims to investigate the influence of financial risk and ownership structure on the level of environmental, social, and governance (ESG) disclosure in the energy sector in Indonesia. The research addresses the gap in ESG literature by integrating financial performance indicators and shareholding composition into a unified disclosure model. Research methodology - A quantitative research design was employed using purposive sampling of 69 firm-year observations from energy companies listed on the Indonesia Stock Exchange between 2020 and 2023. ESG disclosure was measured using the Nasdaq ESG indicators. Multiple linear regression was used to analyze the relationship between return on assets (ROA), managerial, institutional, and foreign ownership, and a dummy variable representing the COVID-19 period. Findings - The results indicate that only institutional ownership significantly and positively influences ESG disclosure. ROA, managerial ownership, foreign ownership, and the COVID-19 dummy variable do not have significant effects. Research limitations - Binary scoring applied to ESG disclosures may limit the extent or quality of disclosure. The follow-up time is only 3 years. Practical implications - The results indicate that institutional investors may be effective enforcers of ESG considerations, particularly in high-environmental-impact industries. Originality/Value - This research fills a literature gap by employing Nasdaq ESG indicators in an emerging market setting, with a focus on energy companies in the aftermath of the pandemic.