Page 61 - SUSTAINABILITY ISSUES & COVID-19

their credentials. The market (the creditor) practically can either punish or reward the firm’s ESG weakness or strength,
through increasing or lowering the interest rate offered. The creditors are suggested to enhance this market role
effectiveness further in the future, to push forward the company’s commitment towards more real sustainable action
and disclosure.

This study enriches the literature documentation of the economic value of the non-financial sustainability disclosure
for the Indonesia context and the other ASEAN countries. This research has confirmed a positive correlation between
ESG and cost of debt, interpreted that despite its benefit, the ESG disclosure has been seen as costly by the business
practitioners. To reverse out the implied perception that the excessive sustainability disclosure could be an action
to cover up the company sustainability weakness, the Companies in ASEAN region may benefit from prominent
government policy, that enables a more synergy to achieve the SDGs, and especially the promising economic integration
(AEC). This finding may raise awareness of regulators whereby a countermeasure is needed for the market to shift their
perception on the ESG disclosure to yield in more favourable impact in the ASEAN region. Countermeasure may include
incentives for green initiatives companies, a higher tax levy on natural resources used to reduce exploitation, energy
subsidy reforms, carbon tax and emission trading systems. Lastly, the regulator may need to revisit and establish a more
integrated and clearer framework/standards and practical guidance for the ESG disclosure that works within the ASEAN
region.

The limitation of this research is first, the limitation of the source of information due to the secondary data used and
it is dependant on Bloomberg methodology on the proxies used. The dependent variables used did not incorporate
the country risk premium that varies between the ASEAN countries, whereby the higher premium is expected from
developing countries compared to the developed ones. Future research will be more precise in the impact estimation
by using primary data, as ESG practise becomes more harmonised within the companies in ASEAN, and to include
the country risk premium. The methodology for ESG disclosure measurement and its financial impact represents the
opportunity for future research. There is also a limitation of the country sampled in the ASEAN region, for example by
excluding Vietnam due to the incomplete financial information. Therefore, this research only focuses on the five ASEAN
countries as observation samples with limited benchmark index in Singapore, Malaysia and the Philippines which have
not represented the whole ASEAN population. Additionally, there are also a few research with ESG topic conducted in
ASEAN. In combination, it may lead to a limited result from the country-by-country test and a limited source of reference
to understand the similarities and differences between countries that may have caused any variance outcome from the
country-by-country test. It will be beneficial to expand to more countries in the region and more extensive companies,
to understand the diverse ESG disclosure practices and its relationship to the local loan financing.

60 International Conference on Sustainability
(5 Sustainability Practitioner Conference)
Th