The Influence of Environmental, Social & Governance (ESG) Risk Rating on Debt Financing in Companies Listed on IDX ESG Leaders

Ria Mairosa; Susi Sarumpaet

doi:10.61132/ijema.v1i3.135

Authors

Ria Mairosa Lampung University
Susi Sarumpaet Lampung University

DOI:

https://doi.org/10.61132/ijema.v1i3.135

Keywords:

Debt Financing, ESG Risk Rating

Abstract

This study analyzes the impact of Environmental, Social & Governance (ESG) Risk Rating on Debt Financing in companies listed on IDX ESG Leaders for the period 2020-2023. Data was obtained through saturated sampling techniques and used an unbalanced panel with 30 companies included in IDX ESG Leaders for each period over the 3-year observation period, resulting in a total of 90 samples. The variables studied include ESG Risk Rating, Leverage, and Profitability. The results show that ESG Risk Rating has a significantly negative impact on Debt Financing. Control variables such as leverage do not impact Debt Financing, whereas profitability has a significantly negative impact on Debt Financing.

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