The Impact of Green Accounting Implementation, Environmental Performance, and Corporate Social Responsibility on Financial Performance and Their Implications for Firm Value: A Case Study of the Energy Sector Risna Rusniar (a*), Dewi Sarifah Tullah (b)
a) Master of Accounting, Institut Bisnis Infromatika Kesatuan
Jalan Ranggagading No 1, Bogor 16123, Indonesia
*risnarusniarr[at]gmail.com
b) Master of Accounting, Institut Bisnis Infromatika Kesatuan
Jalan Ranggagading No 1, Bogor 16123, Indonesia
*dewisarifah[at]ibik.ac.id
Abstract
The energy sector, known for its substantial environmental footprint, is pivotal in green accounting and corporate social responsibility (CSR) practices. Given its significant environmental impact, the energy sector is under immense scrutiny for implementing sustainable practices. Green accounting involves incorporating environmental costs into financial decision-making, while CSR focuses on broader corporate responsibilities towards society and the environment. These practices are crucial for improving economic performance and firm value and meeting stakeholder expectations and regulatory requirements.
This study examines the effect of green accounting, measured by environmental costs, environmental performance evaluated through the PROPER rating, and CSR assessed using the CSR Index, on the financial performance of energy sector companies. It also explores the mediating role of firm value in this relationship. The sample includes energy sector companies listed on the Indonesia Stock Exchange (IDX) from 2017 to 2021. We use secondary data from annual financial and sustainability reports. Eleven companies were selected using purposive sampling and analyzed with panel data regression using EViews 12.
The results indicate that green accounting, proxied by environmental costs, and CSR, proxied by the CSR Index, positively influence financial performance and firm value. However, environmental performance, represented by the PROPER rating, does not significantly affect financial performance or firm value in the sampled energy sector companies. This study provides new insights by integrating green accounting, environmental performance, and CSR into a single model to understand their combined effects on financial performance and firm value in the energy sector, a comprehensive approach not widely explored in the existing literature.
Keywords: Green Accounting, Environmental Performance, Corporate Social Responsibility, Financial Performance, Energy Sector
Topic: Sustainable Business Practices in the Energy Sector
