THE EFFECT OF ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) ON FINANCIAL PERFORMANCE DURING COVID-19 WITH FIRM SIZE AS MODERATION

This study investigates the impact of Environmental, Social, and Governance
(ESG) factors on financial performance during the COVID-19 pandemic, with a
particular focus on profitability as measured by Return on Equity (ROE) and
solvency as measured by Debt-to-Equity Ratio (DER). This study also examines
the moderating role of firm size in this relationship. Contrary to initial
expectations, the empirical analysis shows that ESG factors do not affect
profitability or solvency during the pandemic. In addition, firm size does not
moderate the relationship between ESG and financial performance metrics. This
study provides important insights into the dynamics of ESG considerations during
the global crisis, highlighting the need for a more comprehensive understanding
of this relationship. Recommendations for future research include exploring more
detailed aspects of ESG, incorporating longitudinal analysis, and considering
industry and geographic variations. These findings offer valuable implications for
policymakers and firms seeking to integrate sustainable practices, emphasizing
the importance of a nuanced approach to ESG considerations in the context of the
economic crisis.