DO ENVIRONMENTACOSTS AND HUMAN CAPITAINFLUENCE “ENVIRONMENTAL, SOCIAAND GOVERNANCE (ESG) PERFORMANCE” ? (Case Study of the LQ45 Company Listed on the Indonesia Stock Exchange (BEI) for the 2020 – 2022 Period)

Abstract

The increasing awareness of the importance sustainability and sociaresponbility makes ESG a significant factor in investment decisions and corporate busines stategies. ESG risk rating is carried out to evaluate the extent to which the company can manage ESG risk. However, now there are stilmany companies that have a high risk rating including severaLQ45 companies that are listed on the Indonesian Stock Exchange. This research aims to find out whether environmentacosts and human capitaaffect environmental, sociaand governance performance. Environmentacost in this study are measured using the expenses incurred by the company for environmentaactivities. Human capitais measured using the Pulic method with the VAHU formula. Environmenral, Sociaand Governance is measured using ESG risk rating by Sustainalytics. The population in this study consist of LQ45 companies listed on the Indonesia Stock Exchange for period 20202022. The seected sample consists of 14 LQ45 companiesusing the purposive sampling method. The anaysis method used is mutiple linear regression analysis, pracede by the classicaassumtion test and hypothesis testing  using t test and f test. The research result show that partially environmentacost do not have significant affect on environmental, social, and governance (esg) performance and humman capitahas a significant negative affect on environmental, social, and governance (esg) performance. Meanwhile, it simultaneously shows thas environmentacost and human capitahave a significant affect on environmental, social, and governance (esg) performance.