Environmental, Social, Governance (ESG) and Tax Avoidance: The Role of Earnings Management as a Moderator
DOI:
https://doi.org/10.32493/JABI.v9i2.y2026.p193-215Keywords:
ESG, Tax Avoidance, Earnings Management, Reciprocal Impact, Energy SectorAbstract
Environmental, Social, and Governance (ESG) is a practice carried out by companies to disclose non-financial information. This disclosure is expected to provide additional information to investors in making investment decisions. However, tax avoidance and earnings management practices are still carried out by company management, making the relationship between the three interesting to study. This study aims to examine the reciprocal influence between ESG and tax avoidance, and the moderation impact of earnings management. This study is quantitative in nature. The population used is companies in the energy sector, and the sample selection uses purposive sampling techniques. The analysis method using Panel data processing uses Stata version 17. The results obtained are that ESG does not affect tax avoidance, and tax avoidance does not affect ESG. The reciprocal effect between ESG and tax avoidance was not proven for mining sector companies in the 2021-2024 period. Earnings management can weaken the relationship between ESG and tax avoidance, but it cannot moderate the relationship between tax avoidance and ESG. Implications of this result are for regulators to strengthen tax governance and regulation of ESG implementation, and provides insights for knowledge about ESG relationships, tax avoidance, and earnings management.
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