The Role of Green Investment Mediation: Governance and Sustainable Performance

Abstract

This research examines the impact of Board Size (BoD Size) and Audit Committee Meetings (ACM) on Indonesian non-financial companies’ ESG disclosure, incorporating Green Investment (GI) as a mediator. Panel-data approach is used in this study with 145 non-financial companies listed on the Indonesia Stock Exchange during 2016–2024, yielding 1,160 observations. This study also applies the Fixed Effects Model (FEM) as the primary estimation method in the panel data analysis. The empirical results reveal that firms with larger boards and more active audit committees tend to disclose ESG information more extensively, while GI positively influences ESG disclosure. The analysis reveals weak evidence regarding GI’s role in transmitting the effect of BoD Size to ESG disclosure. Furthermore, GI fails to act as a mediator in the relationship between ACM and ESG transparency. These findings suggest that larger boards may support sustainability reporting partly through green investment initiatives, although the effect is relatively weak, while audit committee activity primarily enhances ESG disclosure through direct governance and reporting oversight mechanisms. Ultimately, this study emphasizes that robust corporate governance serves to meet stakeholder information needs while enhancing the accountability of sustainability reporting. Furthermore, it demonstrates that governance is a key driver for ESG disclosure among Indonesian non-financial firms. This study uses the Green Investment mechanism as a mediator linking governance and ESG performance.