THE EFFECT OF ENVIRONMENT, SOCIAL, GOVERNANCE PERFORMANCE AND SHARI’AH COMPLIANCE TOWARDS THE COST OF CAPITAL OF COMPANY LISTED ON INDONESIA STOCK EXCHANGE (IDX)

Beta, Handhayani Azhari (2022) THE EFFECT OF ENVIRONMENT, SOCIAL, GOVERNANCE PERFORMANCE AND SHARI’AH COMPLIANCE TOWARDS THE COST OF CAPITAL OF COMPANY LISTED ON INDONESIA STOCK EXCHANGE (IDX). Diploma thesis, Universitas Andalas.

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Abstract

This study aims to test and finding out the influence of Environmental, Social, Governance (ESG) performance and shari'ah compliant stock on the Cost of Capital. The object of study is companies listed on the Indonesia Stock Exchange (IDX) in 2015-2019. The sample companies were 30 companies selected based on the purposive sampling method. Hypothesis testing was performed using panel data regression analysis with the STATA 14.2 program. The results showed that the environmental pillar score (ENV) and governance pillar score (SOC) had a negative and significant effect on the Weighted Average Cost of Capital (WACC). For the social pillar score (GOV) and shari'ah compliant stock (SCS) variables, the positive and insignificant effect on WACC of company listed on Indonesia Stock Exchange (IDX).

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