Greenwashing, ESG Controversies, and Corporate Performance: The Moderating Role of CSR Strategy
DOI:
https://doi.org/10.24843/EJA.2026.v36.i08.p06Keywords:
Greenwashing, ESG Controversy, Firm Value, Profitability, CSR StrategyAbstract
This study aims to examine the effect of greenwashing and ESG controversy on firms’ value and performance, as well as the role of CSR strategy as a moderating variable in non-financial companies listed on the Indonesia Stock Exchange for the period 2020–2025. The sample consists of 69 companies selected through purposive sampling and analyzed using random-effects panel data regression with clustered standard errors. The results show that greenwashing is proven to suppress firms’ profitability performance (ROA), although it has not yet affected market valuation (PBV). CSR strategy has been shown to increase profitability but has not been reflected in market valuation. ESG controversy is associated with firms’ value and performance. The moderating role of CSR strategy on the relationship between greenwashing and both firm value and performance has no impact, which theoretically can be understood as a consequence of two legitimacy and signaling mechanisms working in opposite directions. Thus, the Indonesian capital market regarding greenwashing practices and ESG controversy has not been consistently formed.
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