The Impact of Environmental, Social, and Governance Disclosure on Corporate Reputation and Its Influence on Firm Value in the Energy Sector

Abstract

This study examines the effects of environmental, social, and governance (ESG) disclosure on firm value, with corporate reputation as a mediating variable. The sample consists of energy sector firms listed on the Indonesia Stock Exchange during 2019–2023. Using Partial Least Squares–Structural Equation Modeling (PLS-SEM), the results indicate that environmental, social, and governance disclosures have significant positive effects on corporate reputation. Governance and social disclosures directly enhance firm value, while environmental disclosure shows no direct effect. Corporate reputation significantly contributes to firm value and partially mediates the relationship between ESG disclosure and firm value. These findings highlight the importance of credible ESG disclosure and reputation building in improving market valuation, particularly in emerging markets and energy-intensive industries.