An Analysis of The Differences in The Impact of Enviromental, Social, and Governance Dimensions on Corporate Business Risk

Abstract

This study aims to analyze the differences in the impact of Environmental, Social, and Governance (ESG) dimensions on corporate business risk. Data were collected through a questionnaire administered to 352 respondents and analyzed using multiple linear regression. The results indicate that the Environmental dimension has a negative and significant effect on all types of business risk, particularly reputational and operational risk. The Social dimension shows inconsistent effects, as it is only significant in reducing operational and financial risk. Meanwhile, the Governance dimension is found to have a significant effect in reducing regulatory and financial risk, but not other types of risk. These findings suggest that not all ESG dimensions have the same impact on business risk, implying that companies should prioritize ESG strategies selectively based on the type of risk they aim to mitigate.