Indonesia Conference Directory

This study examines the effect of ESG/SRI label on profitability, value, and corporate governance, evidence from Indonesia-s top listed firms. Recent evidence shows that large firm with ESG/SRI label has RoE, value, better governance, and capacity to grow better. We use purposive sampling method and sample are listed firm in the SRI-KEHATI Index and outside the SRI-KEHATI index as a comparison, total is 38 companies in the 2014-2018 period, 190 observations. We use Multivariate analysis to determine the effect of all variables involved. We show that significant effect of ESG/SRI label from profitability, value, and corporate governance of SRI and NON-SRI firms. We find that SRI label adds about 8.5 percentage points of ROE and 2.2 percentage points of Sales Growth, SRI label adds about 1.1 percentage points of Tobin-s Q, however NON-SRI has better corporate governance but not effective. Finally, we find that effective corporate governance in accordance with governance principles will increase profitability and firm value.