Green Investment: Incorporate Environment, Social, And Government Factors  In Investment Decision

Pandu Adi Cakranegara; Filson Maratur Sidjabat

doi:10.26533/eksis.v16i1.773

Pandu Adi Cakranegara Universitas Presiden
Filson Maratur Sidjabat Universitas Presiden

https://doi.org/10.26533/eksis.v16i1.773

Abstract views: 1273 ,

PDF downloads: 906

Keywords: Environmental Social Governance, Green Investment, Porter Five Forces, Valuation

Abstract

There are two types of investors, the first is the type of investor who focuses on return on investment and the second type is the investor who pays attention to Environmental, Social, and Governance (ESG) values in investing. This requires management to make adjustments to create a competitive advantage. One of the frameworks used to measure the competitive advantage of a company is the Porter framework. However, Porter's framework needs to be supplemented with ESG values to capture the value creation process in today's business environment. This research is applied research by applying the existing framework in the field. In this case, the framework used consists of two, namely the Porter framework and the LST integration framework. The ESG framework is implemented at the industrial level using industrial divisions based on industrial divisions in the Indonesia Stock Exchange. This study focused on the raw material production sector, namely agriculture, and mining. This study showed that ESG factors affected the competitive advantage of companies and industries. If a company in an industry ignores the value of ESG, the company will experience a decrease in competitiveness. Meanwhile, if the industry does not pay attention to the ESG factor, the industry will experience a decline compared to other industries that pay attention to the ESG factor.

Downloads

Download data is not yet available.

References

Bohnert, A., Gatzert, N., Hoyt, R. E., & Lechner, P. (2019). The drivers and value of enterprise risk management: evidence from ERM ratings. The European Journal of Finance, 25(3), 234-255.

Bade, R., & Parkin, M. (2019). Essential foundations of economics. Pearson Education.

Briand, R., Urwin, R., & Chia, C. P. (2011). Integrating ESG into the investment process. MSCI ESG Research, New York, NY, available at: www. msci. com/resources/research_papers/integrating_esg_into_the_investment_process_2. html (accessed 20 April 2013).

Cubbage, F., Mac Donagh, P., Júnior, J. S., Rubilar, R., Donoso, P., Ferreira, A., ... & Siry, J. (2007). Timber investment returns for selected plantations and native forests in South America and the Southern United States. New Forests, 33(3), 237-255.

Damodaran, A. (2016). Damodaran on valuation: security analysis for investment and corporate finance (Vol. 324). John Wiley & Sons.

Dawson, A. (2020, January 09). Our push to WTO helps protect Indonesia's vital log export ban from threat of trade tariffs. Retrieved August 23, 2020, from https://eia-international.org/blog/our-push-to-wto-helps-protect-indonesias-vital-log-export-ban-from-threat-of-trade-tariffs/

Devi, S. K. (2020). Pengaruh Struktur Modal dan Risiko Perusahaan terhadap Nilai Perusahaan (Studi Kasus pada Perusahaan Pertanian yang Terdaftar di Bursa Efek Indonesia Periode 2009-2018) (Doctoral dissertation, Universitas Negeri Semarang).

Esteves, A. M. (2008). Mining and social development: Refocusing community investment using multi-criteria decision analysis. Resources Policy, 33(1), 39-47.

Foo, N., Bloch, H., & Salim, R. (2018). The optimization rule for investment in mining projects. Resources Policy, 55, 123-132.

Freudenreich, B., Lüdeke-Freund, F., & Schaltegger, S. (2020). A stakeholder theory perspective on business models: Value creation for sustainability. Journal of Business Ethics, 166(1), 3-18.

Giovanni, A., Utami, D. W., Astuti, U. D., & Fania, F. (2021). Konflik Keagenan dalam Perspektif Keuangan Keperilakuan. JAF-Journal of Accounting and Finance, 5(1), 1-10.

Harsanto, B. (2020). Inovasi Internet of Things pada Sektor Pertanian: Pendekatan Analisis Scientometrics. Informatika Pertanian, 29(2), 111-122.

Hendayana, R. (2020). Membangun Sistem Diseminasi di Era Disrupsi: Peluang dan Tantangan Mempercepat Hilirisasi Inovasi Pertanian. Global Media Publikasi.

Holland, J. (2011). A conceptual framework for changes in fund management and accountability relative to ESG issues. Journal of Sustainable Finance & Investment, 1(2), 159-177.

Kilduff, G. J. (2019). Interfirm relational rivalry: Implications for competitive strategy. Academy of Management Review, 44(4), 775-799.

Landes, M. R. (2008). The environment for agricultural and agribusiness investment in India (No. 1476-2016-121004).

Li, T. (2019). Escaping Bear Hugs: A New Venture's Network Building and the Effects on Its Bargaining Power (Doctoral dissertation).

Maharani, P. (2021). Pengaruh Green Accounting pada Nilai Perusahaan Sektor Pertambangan. Edumaspul: Jurnal Pendidikan, 5(1), 220-231.

Omillo, F. O. (2019). Estimating the effect of buyers’ bargaining power on Kenyan small food manufacturers’ income. Independent Journal of Management & Production, 10(2), 548-573.

Palepu, K. G., & Healy, P. M. (2013). Business analysis and valuation: Using financial statements, text and cases.

Penman, S. (2016). Valuation: accounting for risk and the expected return. Abacus, 52(1), 106-130.

Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 86(1), 25-40.

Schramade, W. (2016). Integrating ESG into valuation models and investment decisions: the value-driver adjustment approach. Journal of Sustainable Finance & Investment, 6(2), 95-111.

Sembiring, S. A. (2012). Pengaruh Klasifikasi Industri dan Ukuran Perusahaan terhadap Risiko Bisnis pada Perusahaan Manufaktur Yang Terdaftar di Bursa Efek Indonesia (BEI) (Doctoral dissertation, Universitas Negeri Padang).

Solekhah, M. W., & Efendi, D. (2020). Pengaruh Good Corporate Governance (GCG) terhadap Profitabilitas Perusahaan Sektor Pertambangan. Jurnal Ilmu dan Riset Akuntansi (JIRA), 9(6).

Subramanyam, K. R. (2014). Financial statement analysis. McGraw Hill Education.

Tahu, G. P. (2019). Pengaruh Kinerja Lingkungan dan Pengungkapan Lingkungan Terhadap Kinerja Keuangan (Studi Pada Perusahaan Manufaktur yang Terdaftar di BEI). Jurnal Ekonomi dan Pariwisata, 14(1).

Taleb, N. N., & Blyth, M. (2011). The black swan of Cairo: How suppressing volatility makes the world less predictable and more dangerous. Foreign Affairs, 33-39.

Tandelilin, E. (2010). Portofolio dan Investasi: Teori dan aplikasi. Kanisius.

Yeomans, L. (2017). Qualitative methods in business research.

Green Investment: Incorporate Environment, Social, And Government Factors In Investment Decision

Abstract

Downloads

References

PlumX Metrics