Penerapan Sustainable Finance dalam Aspek Green, Social dan Governance Sebagai Strategi Perusahaan Meningkatkan Kepercayaan Shareholder dan Profitabilitas Perusahaan
DOI:
https://doi.org/10.47747/snfmi.v3i1.3080Abstract
This study aims to examine the impact of sustainable finance implementation on shareholder trust and corporate profitability. Conducted among Indonesian banking companies listed on the Indonesia Stock Exchange that had issued sustainability reports, the study uses secondary data for the 2019–2023 period. Employing Structural Equation Modeling (SEM) analysis, the study reveals that sustainable finance has a positive effect on shareholder trust. Interestingly, the social and governance tests showed no effect on shareholder trust. The study also found that green, social, and governance have a positive impact on corporate profitability. These findings have significant practical implications, highlighting the importance of corporate attention to sustainable finance in bolstering shareholder trust and corporate profitability. The study's goal is to educate various stakeholders on the practical applications of sustainable finance policies within companies as a management strategy to build shareholder trust and enhance corporate profitability for corporate sustainability.
References
Abuatwan, N. (2023). The impact of green finance on the sustainability performance of the banking sector in Palestine: The moderating role of female presence. Economies, 11(10).
Amin, H., Malik, M., & Scheepers, H. (2024). An agency theory unpacking of how monitoring and evaluation affect international development project impact. International Journal of Project Management, 42(8).
Arifin, S. (2024). Analisis dampak pengungkapan sustainability reporting terhadap kepercayaan investor. Jurnal Ekonomi dan Bisnis, 4(1).
Bao, X., Sadiq, M., Tye, W., & Zhang, J. (2024). The impact of environmental, social, and governance (ESG) rating disparities on corporate risk: The mediating role of financing constraints. Journal of Environmental Management, 371.
Bhatnagar, S., Sharma, D., & Bundel, R. (2024). Green finance and investment index for assessing scenario and performance in selected countries. World Development Sustainability, 5.
Bhattacharya, A. (2023). Finance for climate action: Scaling up investment for climate and development.
Busch, T., Bauer, R., & Orlitzky, M. (2016). Sustainable development and financial markets: Old paths and new avenues. Business and Society, 55(3), 303–329.
Caldecott, B., Clark, A., Harnett, E., Koskelo, K., Wilson, C., & Liu, F. (2022). Sustainable finance and transmission mechanisms to the real economy.
Dikau, S., & Volz, U. (2021). Central bank mandates, sustainability objectives, and the promotion of green finance. Ecological Economics, 184.
Donaldson, T., & Preston, L. E. (1995). The stakeholder theory of the corporation: Concepts, evidence, and implications. The Academy of Management Review, 20(1).
Eccles, R. G., Ioannou, I., & Serafeim, G. (n.d.). The impact of corporate sustainability on organizational processes and performance.
Fatemi, A. M., & Fooladi, I. J. (2013). Sustainable finance: A new paradigm. Global Finance Journal, 24(2), 101–113.
Friede, G., Busch, T., & Bassen, A. (2015). ESG and financial performance: Aggregated evidence from more than 2000 empirical studies. Journal of Sustainable Finance & Investment, 5(4), 210–233.
Fu, M., Huang, S., & Ahmed, S. (2024). Assessing the impact of green finance on sustainable tourism development in China. Heliyon, 10(10).
Habib, A., Oláh, J., Khan, M. H., & Luboš, S. (2025). Does integration of ESG disclosure and green financing improve firm performance? Practical applications of stakeholders theory. Heliyon, 11(4).
Hair, J., & Alamer, A. (2022). Partial least squares structural equation modeling (PLS-SEM) in second language and education research: Guidelines using an applied example. Research Methods in Applied Linguistics, 1(3).
Higgins, M. (n.d.). Financial globalization and the U.S. current account deficit.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 4. Harvard University Press.
Kashi, A., Laallam, A., Mansour Nomran, N., Azmi Abumughli, A., & Al-Binali, T. (2024). Do institutional environment and corporate governance structures determine Islamic banks’ sustainability performance? Evidence across key jurisdictions in the Islamic finance industry. Borsa Istanbul Review.
Khababa, N., & Jalingo, M. U. (2023). Impact of green finance, green investment, green technology on SMEs sustainability: Role of corporate social responsibility and corporate governance. International Journal of Economics and Finance Studies, 15(3), 438–461.* https://doi.org/10.34109/ijefs.202315321
Krisna Bayu, E., & Novita, N. (n.d.). Analisis pengungkapan sustainable finance dan green financing perbankan di Indonesia. Journal of Business Management Review, 2(2), 92–106.*
Kwilinski, A., Lyulyov, O., & Pimonenko, T. (2025). The role of green finance in attaining environmental sustainability within a country’s ESG performance. Journal of Innovation and Knowledge, 10(2).
Lanciano, E., Previati, D., Ricci, O., & Santilli, G. (2024). Financial literacy and sustainable finance decisions among Italian households. Journal of Economics and Business.
Lesmeister, S., Limbach, P., & Goergen, M. (2022). Trust and monitoring. Journal of Banking & Finance, 143.
Lewicki, R. J., & Bunker, B. B. (2012). Developing and maintaining trust in work relationships. In Trust in organizations: Frontiers of theory and research (pp. 114–139). SAGE Publications.
Liu, C., & Wu, S. S. (2023). Green finance, sustainability disclosure, and economic implications. Fulbright Review of Economics and Policy, 3(1), 1–24.*
Mayer, R. C., Davis, J. H., & Schoorman, F. D. (1995). An integrative model of organizational trust. The Academy of Management Review, 20(3).
Meng, J., Ye, Z., & Wang, Y. (2024). Financing and investing in sustainable infrastructure: A review and research agenda. Sustainable Futures, 8. Elsevier Ltd.
Meng, Y., & Zhao, L. (2025). Online public opinion attention and corporate green finance development. International Review of Economics and Finance, 100.
Friedman, M. (n.d.). The social responsibility of business is to increase its profits.
Orlitzky, M., Schmidt, F. L., & Rynes, S. L. (2003). Corporate social and financial performance: A meta-analysis. Organization Studies, 24(3), 403–441.
Porter, M. E., & Kramer, M. R. (n.d.). Creating shared value: How to reinvent capitalism—and unleash a wave of innovation and growth. Harvard Business Review.
Rahman, M. M., & Hossain, M. E. (2024). Green technology, policy, and sustainable finance nexus with SDG-12: Moderating effects of stakeholder awareness. Sustainable Futures, 8.
Rataj, O., Alcorta, L., Raes, J., Yilmaz, E., Riccardo, L. E., & Sansini, F. (2025). Sustainability vs. profitability: Innovating in circular economy financing practices by European banks. Sustainable Production and Consumption, 53, 1–16.
Sarhan, A. A., & Al-Najjar, B. (2023). The influence of corporate governance and shareholding structure on corporate social responsibility: The key role of executive compensation. International Journal of Finance & Economics, 28(4), 4532–4556.
Smith, A., Tennent, K. D., & Russell, J. (n.d.). Berle and Means’s “The modern corporation and private property”: The military roots of a stakeholder model of corporate governance.
Subhani, B. H., Zunhuan, S., & Khan, M. A. (2025). Finance for a greener future: Evolving the financial sector for ESG and sustainable corporate debt management. Borsa Istanbul Review.
Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. The Academy of Management Review, 20(3), 571–610.
Wang, Y., & Zhi, Q. (2016). The role of green finance in environmental protection: Two aspects of market mechanism and policies. Energy Procedia, 104, 311–316.
Zhou, G., Liu, L., & Luo, S. (2022). Sustainable development, ESG performance, and company market value: Mediating effect of financial performance. Business Strategy and the Environment, 31(7), 3371–3387.
