Green Investment: Incorporate Environment, Social, And Government Factors In Investment Decision

Abstract

There are two types of investors, the first is the type of investor who focuses on return on investment and the second type is the investor who pays attention to Environmental, Social, and Governance (ESG) values in investing. This requires management to make adjustments to create a competitive advantage. One of the frameworks used to measure the competitive advantage of a company is the Porter framework. However, Porter's framework needs to be supplemented with ESG values to capture the value creation process in today's business environment. This research is applied research by applying the existing framework in the field. In this case, the framework used consists of two, namely the Porter framework and the LST integration framework. The ESG framework is implemented at the industrial level using industrial divisions based on industrial divisions in the Indonesia Stock Exchange. This study focused on the raw material production sector, namely agriculture, and mining. This study showed that ESG factors affected the competitive advantage of companies and industries. If a company in an industry ignores the value of ESG, the company will experience a decrease in competitiveness. Meanwhile, if the industry does not pay attention to the ESG factor, the industry will experience a decline compared to other industries that pay attention to the ESG factor.

Incremental Green Investment Rule Induction Using Intelligent Rough Sets from an Energy Perspective

“…However, the MCDM methods might have some limitations, such subjectivity, trade-offs and conflicting objectives, sensitivity to methodology, and lack of transparency [37]. Specifically, complexity is increased in cases where the data are more diversified and enlarged, which makes traditional MCDM methods difficult to apply in the big data era, and we know that green investment research is increasingly incorporating big data analysis [24]. For example, Wang et al found out that big data technology makes it feasible to analyze enormous and complex data sets, giving businesses the ability to identify business innovation opportunities and improve their environmentally friendly operations [38].…”

“…Green investment research is increasingly incorporating big data analysis [24]. Big data is prone to the same types of biases as is data analysis utilizing different data sources since it neither modifies the nature of knowledge nor applies fundamentally novel techniques for extracting knowledge from the data.…”

ESG as an Important Factor of Company Profitability and as a Moderation of Corporate Value

“…Clark et al (2014) state that companies that have implemented ESG will produce better operational performance. Cakranegara and Sidjabat (2021) stated that companies implementing ESG will increase the company's competitive advantage, which will ultimately increase company value. Implementing ESG by existing regulations will increase the company's credibility.…”

The Perception Reality of Sustainable Investment in Millennial and Generation Z

“…to increase the competitive advantage that produces favorable performance for companies and also shows two forms of returns from the financial and social sides from stakeholders, such as investors, to engage in investment (Cakranegara & Sidjabat, 2021;Paulakarin et al, 2020).…”