Firm value is often a key focus for stakeholders, including investors, managers and regulators. High value reflects a company's prospects for sustainability, financial stability and competitiveness in the marketplace (Ukoh et al., 2024). In an increasingly global context, investors no longer only pay attention to financial performance, but also pay attention to sustainability aspects reflected in the implementation of Environmental, Social, and Governance (Pierce, 2024) (Yong, 2023).

The (P.W.C., 2023) states that 75% of global investors have integrated ESG factors in their investment decision-making. This confirms that ESG is no longer an option but a strategic necessity that can affect a company's value. Southeast Asia is a region with a dynamic economic population and rapid growth rates. Countries such as Indonesia, Malaysia, Singapore and Thailand have attracted the attention of global investors due to their huge economic growth potential and industrial diversity.

Investor interest in ESG-based investments in Southeast Asia has been steadily increasing in recent years (Wilson, 2022) (Yong, 2023)A key driving factor is the growing awareness of the importance of sustainability and social responsibility in business. An Accenture survey (2022) shows around 70% of wealthy investors in Asia have or plan to invest in ESG in the next 12 months, with the highest demand coming from Southeast Asia and India (70-82%). Thailand leads with 82%, followed by Indonesia (81%) and India (77%) (see Figure 1). Investors see ESG not only as an ethical strategy, but also an investment opportunity that delivers positive economic, social and environmental impacts, reflecting the shift towards sustainable investing for long-term value.

As ESG-based investments increase, companies become more aware of environmental, social, and governance issues, but vulnerability to controversy also increases (Al-Hiyari et al., 2023). ESG controversies, such as labor rights violations, environmental scandals, or governance manipulations, may cause investors to lose trust in the company. (Faure et al., 2024) note that the impact of ESG controversies is not only felt on a company's reputation, but also on its share price and ability to attract long-term investment. Thus, it is important to identify and manage ESG risks that may affect firm value.

Figure 2 illustrates the ESG risk scores in the Southeast Asian region in 2022. The data shows that Indonesia has the highest score of 45, indicating the greatest vulnerability to ESG risks compared to other countries in the region. Vietnam, the Philippines, Malaysia and Thailand also have scores that exceed the global average (40.5), signaling that these countries face serious challenges in managing ESG issues. Only Singapore recorded a score below the global average (39.2), reflecting relatively better management of ESG risks. These scores highlight the need for greater attention to ESG risks in Southeast Asia to mitigate the negative impact on firm value. This proves that as corporate awareness of ESG implementation increases, so do the risks that come with it.

Companies with high ESG risk scores tend to be more prone to being involved in ESG controversies, such as human rights violations, environmental damage, or unethical business practices (Lee & Isa, 2024). Therefore, research into the controversy aspect of ESG is becoming increasingly crucial, especially in the Southeast Asian region which is experiencing rapid growth in the application of ESG principles. Unfortunately, there is limited research on the relationship between ESG controversies in the Southeast Asian region. In fact, a deeper understanding of the impact of ESG controversies on corporate performance is crucial for investors, regulators and other stakeholders to make better decisions.

Firm value is often measured through various metrics such as stock price, market capitalization, or Tobin's Q. One of the external factors that can affect firm value is controversy in the ESG aspect. Previous studies such as (Ali et al., 2024), (Anita et al., 2023), (Banjade, 2024), (Abreu Passos & Campos-Rasera, 2024), (Elamer & Boulhaga, 2024), (Faure et al., 2024), (Fernandes et al., 2024) dan (Soschinski et al., 2024) show that ESG controversies can have a significant negative impact on firm value because ESG controversies can damage the company's reputation, reduce investor confidence, and increase the cost of capital. This is in line with the opinion that firm value reflects not only financial performance, but also investors' perceptions of corporate social responsibility (Sutrisno et al., 2024). Thus, companies that are able to demonstrate a commitment to sustainability practices can increase their attractiveness in the eyes of investors, which in turn can increase their market value (Nopriyanto, 2024).

Research on the impact of ESG controversies on firm value has produced mixed and often contradictory findings. Studies from (Aouadi & Marsat, 2018) dan (Melinda & Wardhani, 2020) show a positive relationship between ESG controversies and firm value. This is interesting because it goes against the initial intuition that controversy will always have a negative impact. The research argues that ESG controversies can be a positive signal for investors. Companies that are open and transparent in the face of controversy demonstrate a commitment to good corporate governance and accountability.

Based on the explanation above, this study makes a significant contribution by filling the literature void regarding the role of analyst coverage in moderating the impact of ESG controversy on firm value, especially in the Southeast Asia region. Most of the previous literature focuses more on the direct relationship between ESG controversies and firm value, while the role of analyst coverage as a conduit of information that can reduce the negative effects of ESG controversies has not been widely discussed. Therefore, this study presents a new perspective that is important to understand in the context of emerging markets that have more attention to sustainability issues.

This research design includes explanatory research with a quantitative approach, which is research designed to ensure one or more variables explain the cause or effect of one or more dependent variables (Schindler, 2019) This study was conducted with the aim of identifying the effect of ESG controversy on firm value, as well as examining the moderating effect of analyst coverage on the relationship between ESG controversy and firm value.

The selection was based on several criteria, such as having consecutive ESG controversy scores by Refinitiv Eikon during the 2019-2023 period, as well as data completeness related to total assets, analyst coverage, IPO date, market capitalization, and total revenue. This screening aims to ensure that only companies with relevant and sufficient data are included in the research analysis. After all criteria were applied, the final number of samples that met the criteria was 251 companies with a total of 1,255 observations over the 5-year research period.

Table 1 explains that this study uses a purposive sampling method to select non-financial sector public companies listed on the stock exchanges of Southeast Asian countries. The IN, ML, SG, TH, VI, PH, MY, LA, BR, CA and TL respectively stands for Indonesia, Malaysia, Singapore, Thailand, Vietnam, Philipines, Myanmar, Laos, Brunei Darussalam, Cambodia and East Leste. After all criteria were applied, the final number of samples that met the criteria was 251 companies with a total of 1,255 observations over the 5-year research period. There are 6 research models used, namely :

After the classical assumption test is fulfilled, then the next stage is regression analysis to answer the hypothesis that was previously proposed. Table 3 Results of Panel Data Regression Analysis

The results of this study show unique findings related to the role of analyst coverage in moderating the relationship between ESG controversy and company value during the COVID-19 pandemic. In the context of company value proxied by market capitalization, analyst coverage does not have a significant moderation effect, both in overall conditions and during the pandemic. This shows that the signals provided by analyst coverage are not strong enough to influence the market perception of a company's capitalization during ESG controversy. Market capitalization, which reflects the total market value of a company's shares, is more influenced by macroeconomic risks and market volatility during the pandemic, so the relevance of analyst coverage in this context is limited.

However, different results were found in other research models that used Tobin's Q as a proxy for corporate value. The findings show that during the COVID-19 pandemic, analyst coverage was able to significantly moderate the relationship between ESG and Tobin's Q controversies. This indicates that the role of analyst coverage is more relevant in influencing market expectations for the company's future growth potential. Tobin's Q, as an indicator that reflects the market's assessment of the company's assets, is more responsive to strategic signals provided by analyst coverage, especially related to the company's steps in managing ESG issues during the pandemic period.

This study has limitations, namely (1) The study used ESG controversy score data from Refinitiv Eikon, which may not cover all important dimensions in a company's sustainability assessment. The data available in Refinitiv Eikon may have limitations in terms of accuracy or comprehensiveness, so the results of the study may be affected by the quality of the data. Therefore, conducting research using other databases such as Bloomberg or other sources can provide a more diverse perspective and strengthen the findings in this study. (2) The research focuses mostly on companies in the Southeast Asian region, which are still in the early stages of integrating ESG issues into their business strategies. Therefore, the results of this study may not be fully generalizable to other regions with higher levels of ESG maturity, such as Europe or North America.

The results of this study also provide recommendations to investors Investors are advised to be more critical in evaluating the company's ESG reports and not rely solely on analyst coverage recommendations, especially in situations of ESG controversy. A deep understanding of a company's strategy for managing ESG risks can help investors make better decisions. Additionally, investors can diversify their portfolios by paying attention to companies that have a high commitment to sustainability, as this can provide long-term returns. In unstable market conditions, such as the pandemic, investors also need to be more selective about market signals that are relevant to the sustainability of the company.