Non-Financial Information and Firm Risk

ABSTRACT: This research aims to examine how ESG disclosure and risk disclosure affect the total risk of companies. Using cross section data from 355 companies listed in Indonesia Stock Exchange, data regarding ESG disclosure and risk was collected. In this research, ESG and risk disclosures are measured based on content analysis using GRI 4 guidelines for ESG disclosures and COSO ERM for risk disclosures. Using multiple regression, it is concluded that only risk disclosure can reduce the company’s total risk, while ESG disclosure cannot affect the company’s total risk. This shows that only risk disclosure is relevant in determining a company’s total risk.

KEYWORDS: ESG disclosure, risk disclosure, firm risk