Literature Review: The Effect of Environmental, Social, Governance Disclosure on Cash Holding
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Abstract
This research aims to systematically examine the literature regarding influence environmental, Social and Governance (ESG) disclosure of company cash holding policies amidst uncertain global economic conditions. Using the Systematic Literature Review method with a chronological approach, this study analyzed 11 main articles from reputable databases published in the range 2020 to 2025. The results of the review revealed a dichotomy of findings reflecting the opposition between two main perspectives: Agency Theory, which shows that ESG transparency reduces information asymmetry and thus decreases cash requirements, and the Precautionary Motive, which views ESG commitments as drivers of cash accumulation for sustainable investment and future regulatory compliance. In addition, governance characteristics such as gender diversity and board size efficiency were identified as strategic determinants in determining the effectiveness of liquidity policies. This research concludes that ESG plays a dual role as a monitoring tool as well as a value protection instrument, and suggests the use of a global ESG score database for future research on specific industrial sectors in Indonesia
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