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This study aims to examine the role of implementing Environmental, Social, and Governance (ESG) principles in supporting the transition toward a green economy in Indonesia from the perspective of Islamic banking. The research employs a qualitative approach using a library research method, reviewing academic literature published between 2020 and 2025. Data were analyzed through thematic content analysis to identify the alignment between ESG dimensions and maqashid shariah, as well as the challenges and opportunities of ESG implementation within Islamic banking institutions. The findings reveal that ESG application in Islamic banking remains partial, with greater emphasis on the environmental dimension through instruments such as green sukuk and green financing. The social and governance aspects have not yet been fully integrated into sustainability strategies. Nevertheless, integrating ESG with maqashid shariah strengthens the role of Islamic banks as agents of change in sustainable development. The study highlights the importance of establishing specific regulations, transparent reporting systems, and sharia-compliant green financial innovations to enhance the contribution of Islamic banking to Indonesia’s green economy.

This study aims to examine the effect of Environmental, Social, and Governance (ESG) disclosure and energy price volatility on stock returns of energy sector companies listed on the Indonesia Stock Exchange (IDX) during the 2022–2024 period. A quantitative approach was employed using multiple linear regression as the analytical method. The sample consisted of 10 energy companies selected through purposive sampling, based on the availability of sustainability reports, stock price data, and research completeness. The results indicate that ESG disclosure has a positive and significant effect on stock returns, suggesting that companies with higher sustainability transparency tend to gain stronger investor confidence. Energy price volatility also shows a positive and significant effect on stock returns, reflecting the sector’s sensitivity to global energy price dynamics. Simultaneously, both variables significantly influence stock returns, although the relatively low coefficient of determination implies that other factors should also be considered. This study highlights the importance of integrating internal factors (ESG) and external factors (energy price volatility) for investors when making investment decisions in the energy sector.