From ESG Disclosure to Financing Resilience: A Conceptual Framework for Indonesian Islamic Banks
DOI:
https://doi.org/10.68132/jeesg.v1i2.19Keywords:
ESG Disclosure, Non-Performing Financing, Islamic Banking, Maqashid Sharia, Risk MitigationAbstract
Study’s aims: This study aims to develop a conceptual framework analyzing the partial impact of Environmental, Social, and Governance (ESG) disclosures on Non-Performing Financing (NPF) in Indonesian Islamic commercial banks during the 2020-2024 period. Design/Methodology/Approach: As a conceptual paper, this study employs a literature review integrating Agency Theory and Maqashid Sharia to construct research hypotheses and a structural research model. Findings: Based on the literature, the proposed conceptual model hypothesizes that environmental, social, and governance disclosures individually exert a negative influence on NPF, positioning ESG as a strategic mitigation tool against financing risks rather than a mere regulatory compliance. Theoretical contribution/Originality: This study deconstructs the aggregate ESG score into distinct pillars within the context of Islamic banking, merging Sharia objectives (hifdz al-maal) with modern agency conflict resolution
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