WADIAH: Jurnal Perbankan Syariah Vol 10. No 2 . : Hal 58 - 89 DOI : https://doi. org/10. 30762/wadiah. The Role of Profitability in Mediating the Effect of Intellectual Capital and ESG Disclosure on Firm Value in Islamic Banking in the Asean Region Miftahul Farichah1. Eka Wahyu Hestya Budianto2 UIN Maulana Malik Ibrahim Malang. Jawa Timur. Indonesia1,2 220503110074@student. uin-malang. id 1, ala@uin-malang. Abstract The purpose of this research is to understand the role of profitability in mediating the effects of Intellectual Capital and ESG Disclosure on corporate value. The sample used in this study consists of Islamic banks in the ASEAN region that publish annual reports and sustainability reports for the period from 2020 to 2024. The sampling technique used in this study is purposive sampling, with a total of 20 companies being included in the sample over a period of 5 years. Data analysis was conducted using Panel Regression Analysis with the Eviews 12 software, along with the Sobel test, using the website https://quantpsy. org/sobel/sobel. The results show that Intellectual Capital has a significant impact on corporate value in Islamic banks in ASEAN. In contrast. ESG Disclosure does not have a significant impact on corporate value in Islamic banks in ASEAN. Profitability has a significant impact on firm value in ASEAN Islamic banking. Intellectual capital has a significant impact on profitability in ASEAN Islamic banking. ESG disclosure has a significant impact on profitability in ASEAN Islamic Profitability mediates the influence of intellectual capital on firm value in ASEAN Islamic banking. However, profitability fails to mediate the influence of ESG disclosure on firm value in ASEAN Islamic banking. Keywords: Intellectual Capital. ESG Disclosure. Firm Value. Profitability. Abstrak Tujuan penelitian ini yakni untuk mengetahui peran profitabilitas dalam memediasi pengaruh Intellectual Capital dan ESG Disclosure terhadap Nilai Perusahaan. Sampel yang digunakan penelitian ini yakni perbankan syariah kawasan ASEAN yang mempublikasikan laporan tahunan dan laporan | DOI: http://10. 30762/wadiah. keberlanjutan periode 2020-2024. Adapun teknik pengambilan sampel penelitian ini menggunakan Purposive Sampling, dengan total sampel sebanyak 20 perusahaan dalam periode 5 tahun. Teknik analisis data penelitian ini menggunakan Analisis Regresi Data Panel dengan aplikasi Eviews 12 dan Uji Sobel dengan menggunakan website https://quantpsy. org/sobel/sobel. Hasil penelitian ini menunjukkan bahwa Intellectual Capital berpengaruh signifikan terhadap nilai perusahaan pada perbankan syariah ASEAN. Sedangkan ESG Disclosure tidak berpengaruh signifikan terhadap nilai perusahaan pada perbankan syariah ASEAN. Profitabilitas menunjukkan berpengaruh signifikan terhadap nilai perusahaan pada perbankan syariah ASEAN. Intellectual Capital berpengaruh signifikan terhadap profitabilitas pada perbankan syariah ASEAN. ESG Disclosure berpengaruh signifikan terhadap profitabilitas pada perbankan syariah ASEAN. Profitabilitas mampu memediasi pengaruh Intellectual Capital terhadap nilai perusahaan pada perbankan syariah ASEAN. Namun. Profitabilitas tidak mampu memediasi pengaruh ESG Disclosure terhadap nilai perusahaan pada perbankan syariah ASEAN. Kata Kunci: Intellectual Capital. ESG Disclosure. Nilai Perusahaan. Profitabilitas. INTRODUCTION With the rapid development of the global economy, the need for comprehensive and quality information about companies is Corporate management is aimed at achieving short-term goals such as maximizing profits, as well as long-term goals such as enhancing the value of the company. One sector that has seen significant growth in conditions like these is Islamic banking. In terms of international economic competitiveness. Islamic banking outperforms other Islamic financial sectors, especially in ASEAN 1 According to IFDI (Islamic Finance Development Indicato. data, three ASEAN countries currently rank among the top 15. Malaysia. Indonesia, and Brunei Darussalam. 2 Islamic banking still faces challenges in maintaining market performance amidst global economic pressures, as well as the increasing demands for Mohammad Ghozali. Muhammad Ulul Azmi, and Wahyu Nugroho. AoPerkembangan Bank Syariah Di Asia Tenggara: Sebuah Kajian HistorisAo. JES (Jurnal Ekonomi Syaria. , 4. , 44Ae55 . P-ISSN: 2599-1515. E-ISSN: 2776-9569 https://jurnal. id/index. php/wadiah | DOI: http://10. 30762/wadiah. can compete in competitive markets and achieve optimal The best way to increase the value of intellectual capital is through actions that align with the companyAos goals. Meanwhile, the Signaling Theory is a theory that plays a crucial role in transmitting signals to relevant parties, such as information related to a companyAos financial status. 23 Companies use ESG disclosures as a form of positive signal to investors, thereby reducing information asymmetry and demonstrating that the company has good governance practices, low risk levels, and sustainable long-term This leads to increased profitability, as the market perceives the company as more promising and valuable. Therefore, profitability can be seen as a mechanism that helps to counteract the effects of intellectual capital and ESG disclosures on a companyAos Based on the above description, the hypothesis proposed in this study is as follows: H1: Intellectual Capital has a significant impact on company value H2: ESG Disclosure has a significant impact on a company value H3: Profitabilitas has a significant impact on a company value H4: Intellectual Capital has a significant impact on a profitability H5: ESG Disclosure has a significant impact on a profitability H6: Intellectual Capital has a significant impact on company's value, and this impact is mediated by profitability H7: ESG Disclosure has a significant impact on company's value, and this impact is mediated by profitability Sigit Hermawan. AoMakna Intellectual Capital Perspektif The Role Theory Dan The Resource Based TheoryAo. Ekuitas: Jurnal Ekonomi Dan Keuangan, 80, 2013, 256Ae75. Michael Spence. AoJob Market SignalingAo. Quarterly Journal of Economics, 87. Anna Melinda and Ratna Wardhani. AoThe Effect of Environmental. Social. Governance, and Controversies on Firms Value: Evidence From AsiaAo. International Symposia in Economic Theory and Econometrics, 27 . , 147Ae73. P-ISSN: 2599-1515. E-ISSN: 2776-9569 https://jurnal. id/index. php/wadiah | DOI: http://10. 30762/wadiah. RESEARCH METHOD In this research, quantitative methods were utilized, with an explanatory approach being adopted. The data obtained were directly measured and processed, resulting in objective and scientific numerical values. By evaluating the proposed hypotheses, the explanatory approach aims to determine the relationships between one variable and another, as well as the cause-andeffect relationship among the variables under investigation. The sample for this study consists of Islamic banks operating in the ASEAN region during the period from 2020 to 2024. The samples were selected using purposive sampling, a method that ensures equal opportunities for all members of the population to be included in the The samples were chosen based on certain criteria relevant to the research objectives. 26 Out of the 33 Islamic banks in ASEAN, 20 banks met the criteria, they published annual financial reports and comprehensive sustainability reports for the period from 2020-2024. So that the total number of observations is 100. The selection of samples and the research period was made to reflect significant trends in the banking industry. This period is marked by challenges related to post-pandemic situations, as well as rapid digitalization in the banking sector, considering this period is marked by post-pandemic challenges, the acceleration of banking digitalization, and the strengthening of sharia financial regulations, where previous research mostly focus on sectors other than banking. The secondary data used in this study comes from previous research findings, journals, literature, official documents, and annual reports as well as ongoing reports related to Islamic banks in the ASEAN region during the period from 2020-2024. In this study, panel data is used, which consists of a combination of cross-sectional data and time series data. Time series data refers to data that are collected Sugiyono Sugiyono. AoMetode Penelitian Kuantitatif. Kualitatif. Dan R&DAo, in Bandung: CV. Alfabeta, 2017. Ronni Andri Wijaya and others. AoPengaruh Intellectual Capital Terhadap Nilai Perusahaan Dengan Profitabilitas Sebagai Variabel Intervening (Studi Pada Perusahaan Tambang Yang Terdaftar Di Bursa Efek Indonesia Periode 2014-2. Ao. JIMT: Jurnal Ilmu Manajemen Terapan, 2. , 81Ae95 . P-ISSN: 2599-1515. E-ISSN: 2776-9569 https://jurnal. id/index. php/wadiah | DOI: http://10. 30762/wadiah. over a specific period of time to analyze research subjects. The crosectional data, on the other hand, represents Islamic banks in ASEAN, totaling 20 banks. The data was standardized by filtering all sources of data based on each hypothesis, and then processed using the EViews 12 software. In this research, the data analysis method employed is the Panel Data Regression Model and the Sobel test. The Sobel test is calculated using the appropriate formula. For understanding the role of mediation variables, we utilized the Sobel website at https://quantpsy. org/sobel/sobel. The equation for the Panel Data Regression Model is as follows: Y = C XC CC XCC CEZ C Description: : Firm Value : Constant : Intellectual Capital : ESG Disclosure : Coefficient : Profitability (ROE) C : Error In this study, the hypothesis was tested using the following equation to determine the effect of mediating variables on the independent variable: Z = CXC CCXCC C Description: : Profitability (ROE) : Constant : Intellectual Capital : ESG Disclosure : Coefficient C : Error In this study, hypotheses were tested using regression analysis, along with mediation variables and the Sobel test. The equation for this analysis is as follows: Y = 1X1*Z 1X2*Z C P-ISSN: 2599-1515. E-ISSN: 2776-9569 https://jurnal. id/index. php/wadiah | DOI: http://10. 30762/wadiah. Description: : Firm Value : Constant : Regression Coefficient X1*Z : Interaction between Intellectual Capital and ROE X2*Z : Interaction between ESG Disclosure and ROE : Error RESULT AND DISCUSSION According to the observations, there are 33 Islamic banks in the ASEAN region. However, only 20 of these banks have published their financial reports and annual reports. The banks that meet the requirements include 11 Islamic banks from Indonesia, 8 Islamic banks from Malaysia, and 1 bank from Brunei Darussalam. Research Results Descriptive Statistical Analysis Table 1. Descriptive Statistical Analysis Results Description X1_IC X2_ESG Y_PBV Z_ROE Mean Median Maximum Minimum Std. Deviation Observations Source: managed by the author with Eviews12 . According to Table 1, it can be interpreted that in the variable X1, which represents Intellectual Capital, the calculated value using VAIC is 3. 972400 on average. The median value is 3. 615000, the maximum value is 12. 80000, and the minimum value is -5. The standard deviation for this variable is 2. In the variable X2, which represents ESG disclosure, the calculated value using the GRI 2021 criteria is 0. The median value is 0. 420000, the maximum value is 0. 630000, the P-ISSN: 2599-1515. E-ISSN: 2776-9569 https://jurnal. id/index. php/wadiah | DOI: http://10. 30762/wadiah. minimum value is 0. The standard deviation of the ESG disclosure variable is 0. In the Y variable, which represents the company value calculated using the PBV method, the average value is The median value is 1. The maximum value 970000, while the minimum value is 0. The deviation of the company value variable is 2. In the Z variable is Profitability, the average value calculated using ROE is 0. The median value is 100000, the maximum value is 0. 530000, and the minimum value is 0. The deviation of this variable is 0. Analysis of Regression Models for Panel Data Selection The stages of analysis to identify the best model among the Common Effect Model (CEM). Fixed Effect Model (FEM), or Random Effect Model (REM) are used in panel data regression model analysis. Chow Test Chow test is used to determine which model is more appropriate among the Common Effect Model and Fixed Effect Model. Table 2. Chow Test Equation 1 Effect Test Statistic Prob. Cross-section F Source: managed by the author with Eviews12 . Based on Table 2, the Chow test result shows a probability value of 0. 0000 < 0. Therefore, for equation 1, the selected model is the Fixed Effect Model. Table 3. Chow Test Equation 2 Effect Test Statistic Prob. Cross-section F Source: managed by the author with Eviews12 . Agus Tri Basuki and Nano Prawoto. AoAnalisis Regresi Dalam Penelitian Ekonomi Dan BisnisAo, in . nd Ed. Rajawali Pers (Rajawali Pers, 2. P-ISSN: 2599-1515. E-ISSN: 2776-9569 https://jurnal. id/index. php/wadiah | DOI: http://10. 30762/wadiah. Based on Table 3, the Chow test result shows a probability value of 0. 0000 < 0. Therefore, for equation 2, the selected model is the Fixed Effect Model. Hausman Test The Hausman test is used to determine the more appropriate model between the Fixed Effect Model or the Random Effect Model. Table 4. Hausman Test Equation 1 Test Summary Chi-Sq. Statistic Chi-Sq. Prob. Cross-section Source: managed by the author with Eviews12 . According to Table 4, the Hausman test results show a probability value of 0. 7700, which is greater than 0. Therefore, for equation 1, the Random Effect Model is the appropriate choice. Table 5. Hausman Test Equation 2 Test Summary Chi-Sq. Statistic Chi-Sq. Prob. Cross-section Source: managed by the author with Eviews12 . According to Table 5, the Hosman test results show a probability value of 0. 2004, which is greater than 0. Therefore, for equation 2, the Random Effect Model is the appropriate choice. Lagrange Multiplier (LM) Test Lagrange Multiplier Test is used to determine whether the Random Effect Model is more suitable compared to the Common Effect Model. Table 6. LM Test Equation 1 CrossTest Hypothesis Both Time Beusch143. Pagan . Source: managed by the author with Eviews12 . P-ISSN: 2599-1515. E-ISSN: 2776-9569 https://jurnal. id/index. php/wadiah | DOI: http://10. 30762/wadiah. According to Table 6, the LM test results show a probability value of 0. 0000, which is less than 0. Therefore, for equation 1, the most suitable model is the Random Effect Model. Table 7. LM Test Equation 2 CrossTest Hypothesis Both Time Beusch92. Pagan . Source: managed by the author with Eviews12 . According to Table 7, the LM test results show a probability value of 0. 0000, which is less than 0. Therefore, for equation 2, the most suitable model is the Random Effect Model. Classical Assumptions Test . Normality Test The purpose of testing normality is to determine whether the residual variables or confounding variables in the regression model follow a normal distribution. The residual test is performed using the Jarque-Bera test. Table 8. Normality Test Equation 1 Standardized Residuals Jarque-Bera Probability Source: managed by the author with Eviews12 . Table 9. Normality Test Equation 2 Standardized Residuals Jarque-Bera Probability Source: managed by the author with Eviews12 . Based on Tables 8 and 9, the probabilities calculated using the Jarque-Bera test are 0. 195262 and 0. These values are both greater than 0. Therefore, it can be concluded that the data in equations 1 and 2 follows a normal distribution. P-ISSN: 2599-1515. E-ISSN: 2776-9569 https://jurnal. id/index. php/wadiah | DOI: http://10. 30762/wadiah. Multicollinearity Test The purpose of testing for multicollinearity is to determine whether there is any correlation between the independent variables in the regression model. In this study, multicollinearity can be identified based on the values of VIF (Variance Inflation Factor. Table 10. Multicollinearity Test Equation 1 Coefficient Uncentered Centered Variance VIF VIF X1_IC X2_ESG Z_ROE Source: managed by the author with Eviews12 . According to Table 10, the Variance Inflation Factors for each variable are < 10. Therefore, it can be concluded that there is no correlation between the variables X1. X2, and Z and the variable Y. In other words, there is no phenomenon of multicollinearity among these variables. Table 11. Multicollinearity Test Equation 2 Coefficient Uncentered Centered Variance VIF VIF X1_IC 04E-05 X2_ESG Source: managed by the author with Eviews12 . Variable According to Table 11, the variance inflation factors for each independent variable are as follows: 1. 004264 < 10. Therefore, it can be concluded that there is no correlation between variables X1 and X2 and variable Z. In other words, there is no phenomenon of multicollinearity among these . Heteroscedasticity Test The purpose of testing heteroscedasticity is to determine whether the regression model exhibits variance imbalances P-ISSN: 2599-1515. E-ISSN: 2776-9569 https://jurnal. id/index. php/wadiah | DOI: http://10. 30762/wadiah. between the residuals from different observations. This study uses the Glejser test. Table 12. Heteroscedasticity Test Equation 1 Variable Coefficient Std. Error t-Statistic Prob. X1_IC X2_ESG Z_ROE Source: managed by the author with Eviews12 . Table 13. Heteroscedasticity Test Equation 2 Variable Coefficient Std. Error t-Statistic Prob. X1_IC X2_ESG Source: managed by the author with Eviews12 . Based on Tables 12 and 13, it can be determined that the probability values for each independent variable in both Equation 1 and Equation 2 have a probability value > 0. Therefore, it can be concluded that there is no evidence of Hypothesis Test . T-Test (Partia. T-test is used to evaluate the influence of individual or partial independent variables on the dependent variable. The following hypotheses are used in the T-test analysis: H0: If the probability value is > 0. 05, then there is no significant partial influence. Ha: If the probability value is < 0. 05, then there is a significant effect, albeit partial in nature. Table 14. T-Test Equation 1 Variable Coefficient Std. Error t-Statistic Prob. X1_IC X2_ESG Z_ROE Source: managed by the author with Eviews12 . P-ISSN: 2599-1515. E-ISSN: 2776-9569 https://jurnal. id/index. php/wadiah | DOI: http://10. 30762/wadiah. Based on the results obtained in table 14, it can be interpreted that: H1: The impact of Intellectual Capital on Corporate Value. With a coefficient value of 0. 091025 and a t-statistic of 2. 215940, this positive coefficient indicates that every increase in Intellectual Capital by one unit is accompanied by a corresponding increase in Corporate Value of 0. 091025 units. The probability value is 0. 0291, which is < 0. Therefore. H0 is rejected, while Ha is accepted. It can be concluded that Intellectual Capital indeed has a significant impact on the value of Islamic banks in the ASEAN region from 2020-2024. H2: The impact of ESG disclosure on company value. With a coefficient value of 1. 229038 and a t-statistic of 1. 426976, this positive coefficient indicates that any increase in ESG metrics by one unit will be accompanied by a corresponding increase in company value of 1. 229038 units. The probability value is 1568, which is greater than 0. Therefore. H0 is accepted, while Ha is rejected. It can be concluded that ESG disclosure does not have a significant impact on the value of Islamic banks in ASEAN during the period 2020-2024. H3: The impact of profitability (ROE) on company value (PBV). With a coefficient value of 3. 367771 and a t-statistic of 283072, this positive coefficient indicates that any increase in ROE by one unit will be accompanied by a corresponding increase in PBV by 3. 367771 units. The probability value is 0246, which is less than 0. Therefore. H0 is rejected, and Ha is accepted. It can be concluded that profitability has a significant impact on the value of Islamic banks in ASEAN from Table 15. T-Test Equation 2 Variable Coefficient Std. Error t-Statistic Prob. X1_IC X2_ESG Source: managed by the author with Eviews12 . P-ISSN: 2599-1515. E-ISSN: 2776-9569 https://jurnal. id/index. php/wadiah | DOI: http://10. 30762/wadiah. Based on the results obtained in table 15, it can be interpreted that: H4: The impact of Intellectual Capital on profitability (ROE). With a coefficient value of 0. 154676 and a t-statistic of 107199, this positive coefficient indicates that every increase in Intellectual Capital by one unit is accompanied by a corresponding increase in ROE by 0. 154676 units. The probability value is 0. 0000, which means it is less than 0. Therefore. H0 is rejected, while Ha is accepted. It can be concluded that Intellectual Capital indeed has a significant impact on the profitability of Islamic banks in ASEAN during the period 2020-2024. H5: The impact of ESG disclosure on profitability (ROE). With a coefficient value of 0. 435268 and a t-statistic of 2. 854039, this positive coefficient indicates that every increase in ESG metrics by one unit is accompanied by a corresponding increase in ROE by 0. 435268 units. The probability value is 0. 0053, which is less than 0. Therefore. H0 is rejected, while Ha is accepted. It can be concluded that ESG disclosure has a significant impact on the profitability of Islamic banks in ASEAN from 20202024. Determination Coefficient Test (R. The coefficient of determination (RA) is used to assess and measure the extent to which independent and mediating variables can explain the dependent variable, as well as the extent to which independent variables can explain the mediating variable. Table 16. Determination Coefficient Test Equation 1 R-Squared Adjusted R-Squared Source: managed by the author with Eviews12 . According to Table 16, the Adjusted R-Squared value is It can be said that the variables Intellectual Capital. ESG Disclosure, and Profitability (ROE) serve as moderating variables, contributing approximately 73. 86% to the explanation P-ISSN: 2599-1515. E-ISSN: 2776-9569 https://jurnal. id/index. php/wadiah | DOI: http://10. 30762/wadiah. of the company value. The remaining 26. 14% of the variation is explained by other variables outside the regression model used in this study. Table 17. Determination Coefficient Test Equation 2 R-Squared Adjusted R-Squared Source: managed by the author with Eviews12 . According to Table 17, the Adjusted R-Squared value is It can be said that the variables AuIntellectual CapitalAy and AuESG DisclosureAy account for 59. 24% of the variance related to profitability. The remaining 40. 76% of the variance is explained by other variables outside the regression model used in this study. Path Analysis . Sobel Test The Sobel Test is used to test the significance of Analysis tool can be found at Web . ttps://quantpsy. org/sobel/sobel. The hypotheses used in the Uji Sobel test are as follows: H0 : If the p-value is > 0. 05, then the median variable does not play a significant role. Ha : If the p-value is < 0. 05, then the mean of the mediator variable plays a significant role. The following is the regression model of the independent variables Intellectual Capital and ESG Disclosure on the mediating variable Profitability: Table 18. Regression Model Equation 1 Variable Coefficient Std. Error t-Statistic Prob. X1_IC X2_ESG Source: managed by the author with Eviews12 . Below is the regression model: the mediating variable Profitability affects the dependent variable Company Value: Table 19. Regression Model Equation 2 P-ISSN: 2599-1515. E-ISSN: 2776-9569 https://jurnal. id/index. php/wadiah | DOI: http://10. 30762/wadiah. Variable Coefficient Std. Error t-Statistic Prob. X1_IC X2_ESG Z_ROE Source: managed by the author with Eviews12 . Below are the results of the Sobel test, which examines the impact of Intellectual Capital on corporate value, as mediated by profitability: Table 20. Sobel Test Results X1 Input t-statistic p-value Sobel test 2. Aroian test 2. Sa 0. Goodman test 2. Sb 1. Source: managed by https://quantpsy. org/sobel/sobel. The following are the results of the Sobel test of the effect of ESG Disclosure on Company Value mediated by Profitability: Table 21. Sobel Test Results X2 Input t-statistic p-value Sobel test 0. Aroian test 0. Sa 0. Goodman test 0. Sb 1. Sumber: managed by https://quantpsy. org/sobel/sobel. Based on the results of the Sobel test in tables 20 and 21, it can be interpreted that: H6: The impact of intellectual capital on corporate value is mediated by profitability. The value of the t-statistic in the Sobel test is 2. 08428997, which is > 1. Additionally, the p-value is 0371338, which is < 0. Therefore. Ha is accepted, while H0 is rejected. This means that profitability can effectively mediate the impact of intellectual capital on corporate value. H7: The impact of ESG disclosure on company value is mediated by profitability. The p-statistic for the Sobel test is 80932537, which is < 1. Additionally, the p-value is P-ISSN: 2599-1515. E-ISSN: 2776-9569 https://jurnal. id/index. php/wadiah | DOI: http://10. 30762/wadiah. 41832802, which is > 0. Therefore. Ha is rejected, and H0 is accepted. This means that profitability alone is not sufficient to account for the impact of ESG factors on company value. Discussion The Effect of Intellectual Capital on Firm Value Based on the partial test, the coefficient of correlation between intellectual capital and the value of Islamic banking companies in ASEAN is significant, at 0. 0291 (< 0. This indicates that intellectual capital indeed has a significant impact on the value of Islamic banking companies in ASEAN. This result is consistent with previous studies by Berzkalne & Zelgalve . and Deniswara et al. , which found that intellectual capital can create competitive advantages that positively contribute to the value of companies. This occurs because, in the practice of Islamic banking, operational success heavily depends on the human resources' ability to understand and apply Sharia principles. 29 Optimal management of intellectual capital can minimize operational errors, improve the quality of financing, and maintain customer trust, thereby enhancing investor perception and company 30 The competence, honesty, and knowledge are the main foundations in resource management and strategic responsibility, which are highly relevant to Intellectual Capital, particularly human capital and structural capital. The Effect of ESG Disclosure on Firm Value Based on the partial test, the significance of ESG disclosure factors in relation to the value of Islamic banking Kevin Deniswara and others. AoIntellectual Capital Effect. Financial Performance, and Firm Value: An Empirical Evidence from Real Estate Firm, in IndonesiaAo. Journal The Winners, 1 . , 49 0. This indicates that ESG disclosure does not have a significant impact on the value of Islamic banking companies in ASEAN. This result is consistent with previous studies by Adhia & Paramita . and Jeanice & Kim . , which found that ESG disclosure measures do not necessarily trigger immediate responses from the market, especially in the financial sector. Investors still prioritize financial performance over non-financial information. One of the reasons for this is that ethical, social, and governance principles are inherently integrated into the principles of Islamic banking. As a result. ESG factors no longer serve as a significant differentiating factor among banks. Additionally, disclosures related to ESG remain purely normative in nature, and investors view them merely as supplementary information. This means that these disclosures do not effectively contribute to enhancing the value of 32 ESG Disclosure serves as a means to demonstrate that business activities do not harm the environment and are conducted responsibly. The Effect of Profitability on Firm Value Based on the partial test, the correlation between profitability and the value of Islamic banking companies in ASEAN is statistically significant, with a significance level of 0246 (<0. This indicates that profitability significantly affects the value of Islamic banking companies in ASEAN. This finding is consistent with previous studies by Putri & Miftah . and Maulida & Karak . , which found that high profitability levels provide positive signals to investors regarding Lusy Laila Adhia and Veronika Santi Paramita. AoThe Effect of Environmental Social Governance (ESG) Disclosure on Firm Value with Profitability and Firm Size as Moderation VariablesAo. Moneta : Journal of Economics and Finance, 3. , 1Ae18. Jeanice and Kim. P-ISSN: 2599-1515. E-ISSN: 2776-9569 https://jurnal. id/index. php/wadiah | DOI: http://10. 30762/wadiah. a companyAos performance and prospects, thereby enhancing the value of the company. This occurs because, in the context of Islamic banking, a high level of profitability indicates that the bank is able to provide financing effectively, manage risks associated with problematic loans, and maintain a balance between Islamic principles and business objectives. 34 From an Islamic perspective, profitability obtained through halal, productive, riba free business activities reflects healthy and sustainable company performance. Those who practice usury will face dire consequences because the system is unjust, oppressive, and does not reflect economic justice. Conversely. Allah has made trade lawful because it involves a fair and productive exchange that benefits both parties. The Effect of Intellectual Capital on Profitability Based on the partial test, the correlation between intellectual capital and the profitability of Islamic banks in ASEAN is significant, with a value of 0. 0090 (< 0. This indicates that intellectual capital indeed has a significant impact on the profitability of Islamic banks in ASEAN. This finding is consistent with previous studies by Ikbal & Abdullah . and Faza & Hidayah . , which found that intellectual capital plays an important role in enhancing corporate profitability. high level of profitability provides positive signals to investors regarding a companyAos performance and prospects, thereby increasing the value of the company. Azlin Shakila Putri and Desrir Miftah. AoPengaruh Intellectual Capital. Leverage. Profitabilitas. Dan Likuiditas Terhadap Nilai PerusahaanAo. CURRENT: Jurnal Kajian Akuntansi Dan Bisnis Terkini, 2. , 259Ae77. Alfiatul Maulida and Maria Evania Karak. AoThe Effect of Company Size. Leverage. Profitability and Dividend Policy on Company Value on Manufacturing Companies Listed on The Indonesia Stock Exchange (IDX) for the 2014-2018 PeriodAo. International Journal of Economics. Business and Accounting Research (IJEBAR), 3. , 6. Ahmad Ikbal and Abdullah Abdullah. AoThe Influence of Intellectual Capital, and Capital Structure on Financial PerformanceAo. Ilomata International Journal of Tax and Accounting, 4 . , 913Ae27