PleSustainable Development Goals: Integrating Green Taxes to Drive ESG Performance in Indonesiaase Just Try to Submit This Sample Abstract Eva Herianti1), Amor Marundha2
Universitas Muhammadiyah Jakarta1)
Universitas Dirgantara Marsekal Suryadarma 2)
Email: eva.herianti[at]umj.ac.id, amor[at]unsurya.ac.id
Abstract
Purpose: The purpose of this study is to map, test, and analyze the influence of green tax on environmental, social, and governance (ESG) aspects in companies in the energy, transportation, and manufacturing sectors.
Design/methodology/approach: This study employed a purposive sampling method to collect samples, comprising the energy, transportation, and manufacturing sectors listed on the Indonesia Stock Exchange (IDX) during 2020-2024. A panel data regression approach was used to test the hypotheses, and Stata was used as the analytical tool.
Findings: The results of this study indicate that the effect of green tax on Environmental, Social, and Governance (ESG) performance differs across industry sectors. In the energy sector, green tax has been shown to have a positive and significant effect on ESG performance. Conversely, in the transportation sector, green tax has a negative and significant effect on ESG performance. Furthermore, in the manufacturing sector, green tax has no significant effect on ESG performance.
Practical implication: The implementation of a green tax policy has the potential to be an effective tool in encouraging sustainable business practices. Companies operating in the energy sector generally respond to this policy by increasing energy efficiency, investing in environmentally friendly technologies, and strengthening corporate environmental governance. Therefore, the government, along with fiscal authorities, can consider expanding the scope of the green tax as an incentive to encourage energy companies to continue innovating and strengthen their commitment to sustainability principles.
Originality/value: This study adds to the literature, as few previous studies have examined the effect of green tax on ESG performance in Indonesia. This is because green tax policy has not yet been established as a mandatory policy in Indonesia. The novelty of this study lies in its approach, which combines empirical mapping of green tax implementation in high-emission sectors with quantitative analysis of its impact on environmental, social, and corporate governance (ESG) aspects. Furthermore, this study also provides empirical evidence on how green tax can be an effective fiscal instrument to promote sustainability performance, particularly in the most impacted energy sector.
Keywords: Green Tax, Environmental, Social, and Governance (ESG), Energy, Transportation, and Manufacturing Sectors
Topic: Environmental Sustainability in Coastal Cities
