Synergy of ESG, AI, and Diversity: SOE Performance Strategy in the Era of Sustainability

Abstract

State-Owned Enterprises (SOEs) need to build good relationships with stakeholders by meeting their demands through transparent disclosure. One such effort is disclosing Environmental, Social, and Governance (ESG) aspects. and Artificial Intelligence (AI) as a strategy to improve the performance of state-owned enterprises (SOEs) in Indonesia in the sustainability era. The purpose of this study is to provide empirical evidence regarding the influence of ESG on the performance of SOEs listed on the Indonesia Stock Exchange (IDX) for the period 2018-2022, as well as the role of gender diversity on the board of directors as a moderator. The sampling technique used was purposive sampling. Based on stakeholder interest theory, ESG disclosure is a business policy that influences interest stakeholders interest external (Triyani et al., 2020). ESG is considered as source potential mark (Albitar et al., 2020), helps investors assess business risks and opportunities (Tahmid et al., 2022), and results in better operations, higher returns, and lower risk (Shaikh, 2022). The trend of ESG-based investing is increasing, with the 2021 Schroders Global Survey showing increased interest in 33 countries. In Indonesia, the 2019 National ESG Survey by CRMS showed that only 15.8% of companies considered ESG, with state-owned enterprises (SOEs) as the primary focus due to their strategic role in the national economy. The study showed that ESG has a positive impact on SOE performance, and gender diversity in board boards reinforces this influence.