PERAN ESG PERFORMANCE DALAM HUBUNGAN LABOR PRODUCTIVITY TERHADAP FINANCIAL PERFORMANCE

Environmental, Social, and Governance (ESG) performance moderates the relationship between labor productivity and financial success. ESG practices are becoming more important in corporate plans, thus it's important to understand how they affect firm performance, specifically labor productivity and financial success. How does ESG performance affect worker productivity and financial success in Indonesia Stock Exchange-listed non-financial firms? This study investigates ESG as a moderating variable, a neglected topic in Indonesia. This quantitative study uses a panel data regression model to examine 2017–2024 Indonesia Stock Exchange non-financial firm data. Firms having full ESG, labor productivity, and financial data are sampled. Labor productivity has a favorable effect on financial success, while ESG performance negatively impacts financial outcomes, demonstrating that ESG does not improve the link between labor productivity and financial success as intended. Sales growth and firm size also predicted financial success more. The study found that ESG performance may improve long-term sustainability without improving financial performance. Business executives and governments should note that sales growth and company size drive financial success. The study suggests studying the long-term effects of ESG policies on corporate performance.