As companies grow and develop in various countries, environmental damage can become a serious problem. One of the causes of environmental damage is the use of resources in an inappropriate manner to gain profit. Based on data obtained from the Ministry of Environment and Forestry, Directorate General of Pollution and Environmental Damage Control, it is known that the quality of the environment in Indonesia has decreased from 2015 with an environmental quality index of 68.23 to 65.14 in 2018. The environmental conditions that have decreased from period to period arising from various cases of resource exploitation, pollution and pollution have triggered global attention to ESG.

The existence of new stone mining has an impact on changes in the landscape, decreased soil fertility, threats to biodiversity, decreased water quality, decreased air quality and environmental pollution. The social impacts of coal mining include conflicts between communities and companies, decreased public health, changes in community mindsets and changes in community mindsets. The existence of new stone mining activities can be a pioneer in the economy, encourage regional development, provide regional and national economic benefits, provide supporting business opportunities, build new infrastructure, provide employment opportunities, open up isolated remote areas and improve knowledge with technology transfer to communities around mining. Mining sector companies are one of the pillars of economic activity in Indonesia with the realization of non-tax state revenue (PNBP) from the mineral and coal sector in December 2018 reaching IDR 46.6 trillion.Indonesia itself is included in the fifth largest coal producer in the world. With a production of around 450 million tons per year, Indonesia is also one of the largest coal exporters in the world, especially to other Asian countries such as China, India, and Japan (pintu.co.id).

A company has goals that the owner and management want to achieve [1]. The company owner wants optimal profit from the business being run, in addition, the owner also expects results from the capital invested so that it can provide additional capital (new investment) and prosperity for the owner and all employees. For management, the profit obtained is the achievement of a previously determined plan (target). Failure to achieve the target can damage the company's image (value) and the owner's trust in the management's future career.

According to the Ministry of Environment and Forestry (KLHK), industrial activities are ranked second as a factor causing increased air pollution in Jakarta by 41% after motor vehicles by 44%. The Center of Economic and Law Studies (Celios) revealed that the impact of high levels of air pollution in Jakarta is a decrease in investment interest. This phenomenon proves that the impact of industrial activities on the environment excessively can weaken the value of the company. Companies often ignore the environment because they are too focused on profitability alone. As a result, environmental damage occurs and is thought to have a significant effect on human existence.This global challenge has prompted various parties, especially global and domestic investors, to realize the importance.

Environmental, Social, and Governance (ESG) is a standard designed to evaluate and regulate the environmental, social, and governance performance of a company . High company value for good ESG performance is believed to lead to the creation of public trust regarding the business and products presented by the company. Stakeholder theory states that companies also need to fulfill the interests of stakeholders in addition to maximizing shareholder profitability, therefore, ESG performance is intended as one of the company's efforts to increase stakeholder value including value for shareholders. In addition to ESG performance, green innovation and eco-efficiency are also thought to be able to increase company value. Green innovation creates new environmentally friendly products as a competitive advantage for the company. Green innovation carries the concept of innovation that is not much different from the general, only it prioritizes reducing environmental impact as its competitive advantage.

Much literature has investigated the relationship between ESG (ESG) and firm value, but does not show consistent research results. Research shows a positive relationship between ESGD and firm value. This indicates that companies with better ESG performance and disclosure values ​​will have higher firm value when compared to companies with lower ESG performance and disclosure values.

Other studies also show a negative relationship between ESG and company value, namely research. This is because the market can interpret that gradual disclosure related to ESG is an attempt by a company to justify excessive investment in ESG activities. Research also shows no relationship between social aspects and company value. This study is different from previous studies because it uses earnings management as an intervening variable,The objects used in this study are coal companies listed on the Indonesia Stock Exchange in 2020-2023, using multiple linear regression.

Theory Stakeholders

[2] stated that companies need to balance between maximizing profitability for shareholders and meeting stakeholder needs. Stakeholder theory can be interpreted as a theory that encourages companies to consider stakeholder interests, understand stakeholder demands, be responsible for the decision-making process, and maintain long-term sustainability. This theory is not just a normative theory regarding corporate social responsibility or business ethics. Furthermore, stakeholder theory seeks to understand and manage stakeholder interests whose implications can be developed towards corporate sustainability. The survival of a company depends on stakeholder support because stakeholders have the capability to control the resources needed by the company. stated that disclosure of financial and report users in making economic decisions. 

Hypothesis

ESG Against Company Value

The increasing number of sustainability report disclosures indicates that companies believe that ESG performance can influence investor and public perceptions. Currently, ESG performance is the basis for consideration in investor decision making, as seen from the increasing interest of investors in ESG-based financial instruments. Based on the theorystakeholders, the creation of stakeholder trust in the company due to good ESG performance leads to an increase in the  company's value.Fulfillment of interestsstakeholderswill lead to the sustainability of the company becausestakeholdershold control over the resources needed by the company in running its business. Implicitly, ESG implementation is aimed at companies as an effort to maintain their relationship withstakeholderswhile fulfilling interestsshareholders. Optimal ESG performance by the company will strengthen public legitimacy which will ultimately increase the company's value. who conducted research in Malaysia suspected and found that company value increased proportionally along with the increase in the company's ESG index. Research found that performanceEnvironmental,Social, AndGovernance(ESG) has a positive influence on company value. Thus, this study was conducted to prove the influence of ESG performance on company value. Based on the previous explanation, the hypothesis developed in this study, namely:

H1: Performance Environmental,Social, And Governance (ESG) has a positive effect on company value.

The results of the study  revealed that ESG performance has a negative effect on accrual earnings management, where the governance performance factor has the strongest negative effect, compared to environmental and social performance. In line with the study which revealed that corporate governance has a negative effect on earnings management. In line with the study, the results of sustainability performance measured by ESG performance have a negative effect on earnings management. Supported by research found that CSR has a negative effect on accruals earnings management and real earnings management.

H2: ESG has a negative effect on earnings management

Earnings management refers to the practice in which a company intentionally manipulates financial statements to create a better impression of its financial performance. [3].argue that earnings management is a definition of a series of actions carried out by an entity intentionally, either from general accounting principles or externally, to manage and influence financial statements with certain efforts.

H3: ESG has a positive effect on firm value with earnings management as an intervening variable.

Research design is everything that includes the approach used in the research, the type of research used is explanatory research. This research uses quantitative research methods. Quantitative research methods can be interpreted as research methods based on the philosophy of positivism, used to research certain populations or samples, data collection using research instruments, data analysis is quantitative/statistical, with the aim of testing the established hypothesis.

The object of this research is coal companies on the Indonesia Stock Exchange from 2020 to 2023. This research was conducted based on data sources contained inwww.idx.co.id

Result

Classical Assumption Test

Normality Test

The data normality test in this study uses the Kolmogorov-Smirnov test for each variable. How to find out significance or not. The significance of the normality test results is by paying attention to the numbers in the significance column (sig).

The steps taken in the normality test are as follows:

1. Determining the hypothesis

   : Data is normally distributed, if Asymp. Sig (2-tailed) > α so it is accepted and rejected.

: Data is not normally distributed, if Asymp. Sig (2-tailed) < α so it is rejected and accepted.

1. Determining the level of significance

The significance level for testing the hypothesis in this study used 95% (α = 0.05).

1. Calculation of statistical valuesesg on company value with earnings management as an intervening variable in coal companies listed on the IDX in 2020-2023using SPSS version 25, namely with the Kolmogorov-Smirnov test. The results of the calculation of the data normality test using SPSS version 25 can be seen in the following table:

Table 4.1 Normality calculation results using the Kolmogorov-Smirnov test

1. Decision Based on the calculation results, the valueAsymp. Sig. (2-tailed) > 0.05 or 0.291 > 0.05 so thatit can be concluded thataccepted and rejected, then the ESG data on company value and earnings management are normally distributed because they meet the predetermined criteria.

Multicollinearity Test

Multicollinearity is a condition where there is a correlation between independent variables or between independent variables that are not mutually independent. The multicollinearity test is included in the classical assumption test. The purpose of the multicollinearity test is to determine whether there is a correlation between independent variables in the regression model.

The steps taken in the multicolinearity test are as follows:

Determining the hypothesis

1. If the tolerance value > 0.10, it means that there is no multicollinearity in the regression model.

2. If the tolerance value is < 0.10, it means that multicollinearity occurs in the regression model.

3. If the VIF value < 10.00, it means that there is no multicollinearity in the regression model.

4. If the VIF value > 10.00, it means that multicollinearity occurs in the regression model.

5. Determining the level of significance. The significance level for testing the hypothesis in this study used (α = 0.10).

6. Calculation of statistical values esg on company value with earnings management as an intervening variable in coal companies listed on the IDX in 2020-2023by using SPSS version 25, namely bymulticollinearity.Test calculation resultsmulticollinearityData using SPSS version 25 can be seen in the following table:

Table 4.2 Multicollinearity Test

1. Decision-making

Based on the tableCoefficient and partsCollinearity Statisticsknown tolerance valuefor the Esg (X) variable is 0.325 > 0.10, it can be concluded that there are symptoms of multicollinearity in the regression model because the VIF value is > 10.00.

Heteroscedasticity Test

The heteroscedasticity test is part of the classical assumption test in regression analysis which aims to test whether in the regression model there is inequality of variance (variation) from the residual value of one observation to another.

The steps taken in the multicolinearity test are as follows:

1. Determining the hypothesis

2. If the sig value > 0.05, it means that there are no symptoms of heteroscedasticity in the regression model.

3. If the tolerance value is <0.05, it means that there are no symptoms of heteroscedasticity in the regression model.

4. Determining the level of significance The significance level for testing the hypothesis in this study used (α = 0.10).

5. Calculation of statistical valuesesg on company value with earnings management as an intervening variable in coal companies listed on the IDX in 2020-2023 by using SPSS version 25, namely by testingheteroscedasticity.Test calculation resultsheteroscedasticity Data using SPSS version 25 can be seen in the following table:   

1. Based on the output above, it is known that the significance value (sig) for the esg variable (X) is 0.427. So the significance value of the heteroscedasticity test is 0.427> 0.05, so it can be concluded that there is no heteroscedasticity symptom in the regression model.

Autocorrelation Test

The autocorrelation test aims to test whether in a linear regression model there is a correlation between the disturbance error in period t and the error in period t-1 (previously).

Based on the model summary output table above, it is known that the Durbin-Watson value (d) is 1.589, then the number of independent variables is 1 or k = 1 while the number of samples N = 72, then (k; N) = (1; 72). Then the dL value is 1.589 and Du is 1.645. So it can be concluded that there is a problem or symptom of autocorrelation in the regression model because the Durbin-Watson value is smaller than the upper limit.

Linier Regresion

This test is used to determine the degree or magnitude of influence between independent variables (X) simultaneously or with the dependent variable (Y).

Based on the output table above, the linear regression equation between ESG and company value with profit management as an intervening variable in coal companies listed on the IDX in 2020-2023using SPSS version 25. So the perception of multiple linear regression is as follows:

Y = a + b X

Y = 0.017 + 0.545

From the results of the simple linear regression above, the results can be interpreted that the a value of 0.017 is a constant or condition of esg (X) against the company value with profit management (Y), so the decision value is 0.545.

Analysis of Determination

This determination coefficient test ( ) is used to measure the extent of the independent (free) variation of ESG (X) on the dependent (bound) variable of company value with profit management (Y)..Therefore, the following is the magnitude of the determination() which was analyzed using SPSS 25:

Based on the output above, the Adjusted R Square value is 0.160, which means that ESG (X) has an influence on the dependent variable (bound) of company value with earnings management (Y)..by 1.60% and is in the strong category.

Individual Significance test (T-test)

After the questionnaire data is declared to be normally distributed, the next step is to carry outindividual significance test(T-test) using the SPSS version 25 application as follows:

1. Determining the hypothesis

a. If the sig. value (2-tailed) > 0.05, then it is accepted and rejected, then it is stated that there is a significant influence.

b. If the sig. value (2-tailed) < 0.05, then it is accepted and rejected, then it is stated that there is no significant influence.

1. Determining the level of significance.

The level for testing the hypothesis in this study used 95% (= 0.05)

1. Calculating statistical values

To conduct an individual significance test (t-test) using the SPSS version 25 application

1. Draw a conclusion

It is known that the value of variable X, namely esg, sig. value (2 tailed) is 0.128 > 0.05, then according to the basis for decision making above, it can be concluded that it is accepted and rejected, thus it can be interpreted that there is a positive influence between esg (X) on the dependent variable (bound) of company value (Y1).

Analysis: Based on the output of the “individual significance test” table above:

It is known that the value of variable X, namely esg, sig. value (2 tailed) is 0.427 > 0.05, then according to the basis for decision making above, it can be concluded that it is accepted and rejected, thus it can be interpreted that there is a positive influence between esg (X) on the dependent variable (bound) of company management (Y2).

Simultan Test (Test F)

This test is used to determine the degree or magnitude of influence between independent variables (X) simultaneously or with dependent variables (Y), this coefficient is obtained by taking the solution of the determination coefficient R2. The requirements for the F test are as follows:

1. Determining the hypothesis

2. If the sig. value (2-tailed) < 0.05, then the hypothesis is accepted so that there is an influence between the independent variable (X) and the dependent variable (Y).

3. If the sig. value (2-tailed) > 0.05, then the hypothesis is rejected so that there is no influence between the independent variable (X) and the dependent variable (Y).

4. Determining the level of significance

The level for testing the hypothesis in this study used 95% (= 0.05)

1. Calculating statistical values

To conduct a simultaneous significance test (F Test) using the SPSS version 25 application

Based on the output above, it is known that the significance value for the influence of the ESG variable (X) simultaneously with the company value variable with earnings management (Y) is 0.001 <0.05 and the calculated F value is 13.327> F table 2.70 so that it can be concluded that it is accepted, which means that there is an influence between the independent variable (X) simultaneously with the dependent variable (Y) so that the ESG variable has an effect on the company value of coal companies listed on the IDX in 2020-2023.

The results of this study indicate that ESG partially has a significant positive effect on company value in coal companies in Indonesia throughout the period 2020 to 2023. While ESG simultaneously has a significant effect on company value with earnings management as an intervening variable. This study supports the Stakeholder theory, this provesthat stakeholder trust in the company due to good ESG performance leads to an increase in the company's value.

IMPLICATIONS

This research has been proven to have implications for stakeholder theory because the increase in company value is in line with the increase in ESG performance carried out by the company, this is in line with research that has been conducted.

The managerial implications that can be concluded from the results of this study, for company management as a suggestion, in making decisions, investors also pay attention to ESG and profit management in addition to paying attention to the profits obtained.

The implication for investors is that investors can use ESG performance and earnings management in making investment decisions.

SUGGESTION

The object of this study is limited to coal sector companies listed on the IDX for the 2020-2023 period. Further research can look for other research objects, and add other variables. Further research is expected to expand the period tested, and further research can use other indicators in measuring the variables used.

The authors declare that they have no conflict of interest
 

No funding sources

The study was approved by the University of Jember, Indonesia

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