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This study examines the relationship between voluntary risk disclosure and Environmental, Social, and Governance (ESG) performance among Indonesian publicly listed companies. While ESG metrics have become central to investment evaluations, the influence of narrative risk reporting on ESG scores remains unclear, particularly in emerging markets where such disclosures are not standardized. Utilizing content analysis of 2022 annual reports and ESG ratings provided by Sustainalytics through the Indonesia Stock Exchange, this study investigates whether risk disclosure serves as a credible signal of corporate sustainability. The findings reveal that risk disclosure does not significantly influence ESG performance, suggesting that investors and ESG rating agencies may discount voluntary disclosures when they lack precision or strategic alignment. In contrast, firm-specific characteristics, namely profitability (ROA), leverage, and firm size—are positively associated with ESG scores. These results indicate that internal financial and structural factors may offer more reliable indicators of ESG commitment than unregulated disclosure narratives. The study contributes to the ESG literature by questioning the signaling power of voluntary disclosures and highlights the need for stronger disclosure standards in emerging markets to enhance ESG credibility and comparability.

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Signaling or Symbolism? Reassessing the Link Between Risk Disclosure and ESG Performance

  • 会议论文

  • 发表日期：

    2026年

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  • I. Gusti Ketut Agung Ulupui,
  • Gentiga Muhammad Zairin,
  • Septi Nurmalita,
  • Hera Khairunnia,
  • Dwi Kismayanti Respati,
  • Eka Septariana Puspa

摘要

This study examines the relationship between voluntary risk disclosure and Environmental, Social, and Governance (ESG) performance among Indonesian publicly listed companies. While ESG metrics have become central to investment evaluations, the influence of narrative risk reporting on ESG scores remains unclear, particularly in emerging markets where such disclosures are not standardized. Utilizing content analysis of 2022 annual reports and ESG ratings provided by Sustainalytics through the Indonesia Stock Exchange, this study investigates whether risk disclosure serves as a credible signal of corporate sustainability. The findings reveal that risk disclosure does not significantly influence ESG performance, suggesting that investors and ESG rating agencies may discount voluntary disclosures when they lack precision or strategic alignment. In contrast, firm-specific characteristics, namely profitability (ROA), leverage, and firm size—are positively associated with ESG scores. These results indicate that internal financial and structural factors may offer more reliable indicators of ESG commitment than unregulated disclosure narratives. The study contributes to the ESG literature by questioning the signaling power of voluntary disclosures and highlights the need for stronger disclosure standards in emerging markets to enhance ESG credibility and comparability.