The Effect of ESG Ratings Information on Share Prices

With various encouragement from the world community since the Paris Agreement, companies continue to be encouraged to implement sustainable activities. For this reason, the government through the Financial Services Authority has required public companies to report sustainability activities, also known as ESG (Environment, Social and Governance). The latest development is that public companies listed on the Indonesia Stock Exchange (BEI) are also being assessed regarding ESG activities, which is being carried out by an independent party, namely Morningstar Sustainalitycs. The assessment submitted to the public is related to the score or value of the ESG activities carried out by the company, including whether there is a decrease or increase in value from the previous assessment. This research aims to see whether ESG value information also influences investors' assessments of companies, which is proxied by the company's share price. This research was concluded that there was an influence of information on the decline of ESG risk value provided by the IDX on company share prices using the linear regression statistical method. However the information regarding the ESG Risk clasiffication did not have significant moderating effect on the share price. It is hoped that the implications of this research will increase investor awareness of ESG activities, which will ultimately encourage companies to implement ESG activities seriously.