Citation:

Tasya Ravida Ayu Padantya, Oktofa Yudha Sudrajad. "Evaluating the Impact of ESG Integration on the Financial Performance of Pertamina Geothermal Energy: A Sustainable Growth Perspective" International Research Journal of Economics and Management Studies, Vol. 3, No. 7, pp. 148-159, 2024.

Abstract:

The idea of Environmental, Social, and Governance (ESG) integration has become a key premise directing the strategies and operations of energy firms globally in response to these complex issues Globally Consistent ESG Reporting. This thesis aims to assess how the incorporation of ESG principles affects Pertamina Geothermal Energy's financial performance through meticulous analysis and extensive research. The analysis includes a thorough evaluation of prior financial performance measures, both before and after ESG integration, and a close look at important criteria, including sales growth, profitability, and return on investment. The author uses business ESG performance to build financial estimates. To achieve the company's promises of expansion and sustainability through increased production, injection, and startup. In addition, it examines the many dimensions of the business, including sustainability policies, community involvement programs, and the improvement of corporate governance. According to the computation of absolute valuation using discounted cash flow, the value of each PGEO share is Rp1.069 if using a 10Yr Bond Rate and Rp1.221 using Green Bond, which is both still undervalued, and the IPO price is Rp1.280,00 (as per May 2024). The results of this thesis promise to shed light on a future course in an era where the energy industry is positioned at a crucial crossroads, combining the demand for dependable energy supplies with the need to reduce environmental consequences. The gap between market pricing and fundamental valuations underscores the importance of thorough evaluation and smart investment decisions that prioritize long-term sustainability and financial health.

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Keywords:

Discounted Cashflow, ESG, Green Bond, Valuation.