This study examines the impact of green credit implementation and Corporate Social
Responsibility (CSR) disclosure on firms' valuation in the Indonesian banking industry. The
research is prompted by the issuance of the Financial Services Authority Regulation (POJK)
No. 51/POJK.03/2017, which requires financial institutions, issuers, and publicly listed
companies to adopt sustainable finance practices. Employing a quantitative methodology, this
study utilizes secondary data sourced from annual and sustainability reports of banking
companies listed on the Indonesia Stock Exchange (IDX) for the period 2020–2024. Multiple
linear regression analysis is applied to investigate the relationship between green credit, CSR
disclosure, and firm value, the latter being quantified by Tobin’s Q.
The findings indicate that green credit has a positive, statistically significant influence on firm
value, suggesting that sustainable lending practices bolster corporate reputation, enhance
investor confidence, and contribute to long-term market valuation. Conversely, CSR
disclosure, as evaluated by the Global Reporting Initiative (GRI) Standard, exhibits a negative
and significant impact on firm value, implying that the market may not yet fully recognize the
value of sustainability disclosures or that the costs associated with CSR implementation
surpass the short-term financial gains. Furthermore, profitability (ROE), as a control variable,
negatively affects firm value, indicating that profitability alone does not ensure higher
valuation within a sustainability-oriented framework.
Theoretically, the study advances the literature on sustainable finance by illustrating the
contrasting impacts of green credit and CSR disclosure on firm value. In practice, it highlights
the need for banks to integrate sustainability financing with effective CSR strategies to ensure
that social and environmental initiatives deliver long-term financial gains.