The Moderating Role of Gender Diversity in the Relationship between ESG Disclosure, Ownership Structure, and Financial Performance in Indonesia's Energy Sector

Abstract

This study examines the impact of Environmental, Social, and Governance (ESG) disclosure and ownership structure, including managerial, institutional, and foreign ownership, on the financial performance of energy sector companies in Indonesia, while also investigating the moderating role of gender diversity. Using a quantitative approach, secondary data were collected from the annual and sustainability reports of energy companies listed on the Indonesia Stock Exchange, resulting in 183 observations analyzed using Stata version 19. The findings reveal that ESG disclosure has a significant positive effect on financial performance, and similarly, managerial, institutional, and foreign ownership each contribute positively to company profitability. Gender diversity is also found to have a direct positive effect on financial performance, indicating that the presence of women on corporate boards enhances oversight quality and supports better decision-making processes. However, as a moderating variable, gender diversity does not strengthen the relationship between ESG disclosure or ownership structure and return on assets (ROA). Instead, the interaction effects between gender diversity and ESG, as well as the three ownership structures, are significantly negative, suggesting that the more rigorous oversight, cautious decision-making, and long-term strategic orientation associated with diverse boards may reduce short-term financial gains despite supporting sustainable corporate governance.