Does ESG Performance Affect Tax Avoidance? Moderating Role of ESG Committee

The relationship between ESG disclosures and corporate tax strategies has become increasingly important due to growing stakeholder expectations for firms to transparently report their environmental, social, and governance practices. This study investigates the effect of Environmental, Social, and Governance (ESG) performance on tax avoidance among publicly listed non-financial firms in Indonesia during the 2021–2024 period. Employing Moderated Regression Analysis (MRA), the study utilizes a panel dataset comprising 180 firms listed on the Indonesia Stock Exchange. A key contribution of this research is the inclusion of the ESG committee as a moderating variable to examine how ESG performance influences corporate tax avoidance. The findings reveal that ESG performance positively and significantly affects the Effective Tax Rate (ETR), indicating an inverse relationship with tax avoidance, both for overall ESG performance and for each pillar individually. Moreover, the ESG committee strengthens this effect by serving as a moderating factor, with the social pillar exhibiting the strongest impact in reducing tax avoidance. These results underscore the substantive role of ESG committees in translating ESG practices into more responsible tax behavior.