Digital Climate Governance, ESG Innovation, and Carbon Risk Management on Credit Risk

Catur Widayati

doi:10.69725/ami.v1i2.248

Authors

Catur Widayati Management Department, Faculty of Economics and Business, Universitas Mercu Buana, Indonesia

DOI:

https://doi.org/10.69725/ami.v1i2.248

Keywords:

Carbon risk management, ESG innovation, Digital climate governance, Credit risk, Climate policy stringency

Abstract

Purpose: This study examines the effects of Carbon Risk Management, ESG Innovation, and Digital Climate Governance on corporate Credit Risk, as well as the moderating role of Climate Policy Stringency in the Indonesian context.
Method: Using a purposive sample of non-financial companies listed on the ISE, panel data regression with a fixed effects model is applied. Independent variables are measured through content analysis of sustainability disclosures, while CR is proxied by the Altman Z-Score. Model specification tests, multicollinearity checks, and robust standard errors ensure validity. Moderation is tested through interaction terms between CPS and each primary variable, with robustness confirmed via alternative credit risk measures.
Findings: Results indicate that CRM, ESGI, and DCG each significantly reduce credit risk, with CRM and ESGI showing the strongest effects. CPS amplifies these relationships, suggesting that stricter climate policies enhance the financial benefits of sustainability initiatives. The findings are robust across alternative specifications.
Novelty: This research integrates signaling theory, the resource-based view, and institutional theory to examine the combined role of climate strategies and policy environments in shaping credit risk, a perspective underexplored in emerging markets.
Implications: The study provides actionable insights for managers, policymakers, and investors, highlighting that integrated climate strategies supported by strong policy frameworks can improve creditworthiness and financial resilience.

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Author Biography

Catur Widayati, Management Department, Faculty of Economics and Business, Universitas Mercu Buana, Indonesia

Dr. Catur Widayati, SE., MM, is a faculty member at the Faculty of Economics and Business, Universitas Mercu Buana, Indonesia, specializing in the fields of economics, business management, and strategic decision-making. With a strong academic and research portfolio, she has contributed to various scholarly publications indexed in Scopus, reflecting her expertise and commitment to advancing knowledge in her discipline. Her research interests encompass business strategy, organizational development, and sustainable economic growth, integrating theoretical insights with practical applications. As the corresponding author, Dr. Widayati actively engages in collaborative research, academic mentoring, and professional consultancy, aiming to bridge the gap between academic research and industry needs.

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