Abstract :

In recent business landscape, term of Sustainable Development Goals (SDGs) and Environmental, Social, and Governance (ESG) is interesting for many investors who concern on that. By implementing SDGs and ESG, investors and companies are expect to participate in the world sustainable development target. One of the SDG metric is strengthen efforts to protect and safeguard the world’s cultural and natural heritage. With the 75 samples of cement and cement-related company across the world, this thesis delves into the nuanced of relationship between cultural and natural heritage issues and its cost of equity. Recognizing the profound impact of cultural and natural heritage concerns on corporate reputation, social license to operate, as well investor’s perception, this research endeavors to elucidate the intricate interplay between these variables through research approach encompassing quantitative methodologies. The result of this research is showing that cultural and natural heritage issue is negatively correlate to the cost of equity which means the better the cultural and natural heritage score of a company, the lower its cost of equity among its peers. The regression analysis result in P-Value 0.016; coefficient -6.12 for cultural and natural heritage index impact to cost of equity (in market model) and in P-Value 0.033; coefficient -5.30 for cultural and natural heritage index impact to cost of equity (in Bloomberg CAPM), which considered significant. Implication of these finding are that cultural and natural heritage issue can be a threat for the company image as well can influence various aspects of company activities, if it is not well managed.  Therefore, companies should start concern on any cultural and natural heritage since it has significant implication for investor’s decision and perception which can be depicted in its each cost of equity.

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Keywords :

cement company, cement related company, cost of equity, cultural and natural heritage, SDG’s.

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