The Role of Green Investment Mediation: Governance and Sustainable Performance

Abstract

Main Purpose This study aims to analyze the influence of Board Size and Audit Committee Meetings on ESG disclosure and examine the role of Green Investment mediation in non-financial companies in Indonesia. Method This study uses a quantitative, panel-data approach with 145 non-financial companies listed on the Indonesia Stock Exchange during 2016–2024, yielding 1,160 observations. The analysis was carried out using fixed-effect panel-data regression and the Sobel mediation test. ESG is measured using ESG disclosure scores, while Green Investment is calculated based on turnover allocation for green initiatives. Main Findings The study shows that Board Size and Audit Committee Meetings have a positive, significant effect on ESG disclosure. Green Investment has been shown to have a positive impact on ESG. Still, it significantly mediates only the relationship between Board Size and ESG, whereas the mediation in the relationship between Audit Committee Meetings and ESG is not proven. These findings indicate that a stronger board structure encourages ESG through green investment commitments, while the audit committee's oversight intensity is more directly influential. Theory and Practical Implications This study strengthens Stakeholder Theory by showing the partial role of Green Investment as a mechanism that connects corporate governance and sustainability performance in the context of developing countries. NoveltyResearch is limited to non-financial companies and disclosure-based ESG measurements; further research is recommended using performance-based and broader-sector ESG indicators. 

Keyword: Board Size; Audit Committee Meetings; Green Investment; ESG Disclosure; Corporate Governance