xvii TABLE OF CONTENTS ABSTRACT .......................................................................................................... iii ABSTRAK .............................................................................................................. v STATEMENT OF APPROVAL ....................................................................... vii THE GUIDANCE FOR USING THE THESIS ................................................. ix STATEMENT OF AUTHORSHIP ................................................................. xiii ACKNOWLEDGEMENT .................................................................................. xv TABLE OF CONTENT ................................................................................... xvii LIST OF APPENDICES .................................................................................. xix LIST OF FIGURES ............................................................................................ xx LIST OF TABLES ............................................................................................. xxi Chapter I Introduction ......................................................................................... 1 I.1 Research Background ............................................................................ 1 I.2 Research Question ................................................................................. 7 I.3 Research Objective ................................................................................ 7 I.4 Research Limitation ............................................................................... 8 I.5 Writing Structure ................................................................................... 9 Chapter II Literature Review ............................................................................ 10 II.1 Cost of Debt ........................................................................................ 10 II.2 Stock Return ....................................................................................... 11 II.3 Environment, Social, and Governance ............................................... 12 II.4 Environment, Social, and Governance Pillars ..................................... 13 II.5 Financial Theory to ESG motives ......................................................... 14 II.6 ESG Development in 2000’s .............................................................. 19 II.7 Recent ESG developments ................................................................. 20 II.8 ESG and Cost of Debt ........................................................................ 22 II.9 ESG and Stock Market Performance .................................................. 23 II.10 ESG Anomaly .................................................................................... 24 II.1 ESG Ratings ....................................................................................... 25 II.2 Refinitiv Eikon ESG Rating Score ..................................................... 26 xviii II.3 Theoretical Research Hypothesis .......................................................