Environmental performance, environmental disclosure, and firm value: empirical study of non-financial companies at Indonesia Stock Exchange

Mohamad Nur Utomo; Sri Rahayu; Kaujan Kaujan; Soni Agus Irwandi; Mohamad Nur Utomo; Sri Rahayu; Kaujan Kaujan; Soni Agus Irwandi

doi:10.3934/GF.2020006

Green Finance

2020, Volume 2, Issue 1: 100-113. doi: 10.3934/GF.2020006

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Research article

Environmental performance, environmental disclosure, and firm value: empirical study of non-financial companies at Indonesia Stock Exchange

1.
Departemen of Management, Faculty of Economic, Borneo Tarakan University, Indonesia
2.
Departemen of Accounting, Faculty of Economics and Business, Budi Luhur University, Indonesia
3.
STIE, Perbanas Surabaya, Indonesia

Received: 04 March 2020 Accepted: 27 March 2020 Published: 31 March 2020
JEL Codes: G30, Q50, Q51

This research is aimed to examine the effect of environmental performance on firm value with environmental disclosure as a mediation variable. Sample of research is non-financial companies at the Indonesia Stock Exchange that have followed the Environmental Performance Assessment Program (PROPER) held by the Ministry of Life Environment and Forestry. The data analysis method is Structural Equation Modeling-Partial Least Square (SEM-PLS), and the analysis operation is facilitated by the software of WarpPLS 6.0. The result of analysis has given a few findings. One is that environmental performance has a positive effect on firm value and environmental disclosure. Other result shows that environmental disclosure does not affect firm value and does not mediate the effect of environmental performance on firm value. In general, all the results support the stakeholder theory and the resource-based view theory. Companies with environmentally friendly commitments can be a strategy in creating higher firm value.
- environmental performance,
- environmental disclosure,
- firm value,
- SEM-PLS,
- Indonesia
Citation: Mohamad Nur Utomo, Sri Rahayu, Kaujan Kaujan, Soni Agus Irwandi. Environmental performance, environmental disclosure, and firm value: empirical study of non-financial companies at Indonesia Stock Exchange[J]. Green Finance, 2020, 2(1): 100-113. doi: 10.3934/GF.2020006

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Abstract

This research is aimed to examine the effect of environmental performance on firm value with environmental disclosure as a mediation variable. Sample of research is non-financial companies at the Indonesia Stock Exchange that have followed the Environmental Performance Assessment Program (PROPER) held by the Ministry of Life Environment and Forestry. The data analysis method is Structural Equation Modeling-Partial Least Square (SEM-PLS), and the analysis operation is facilitated by the software of WarpPLS 6.0. The result of analysis has given a few findings. One is that environmental performance has a positive effect on firm value and environmental disclosure. Other result shows that environmental disclosure does not affect firm value and does not mediate the effect of environmental performance on firm value. In general, all the results support the stakeholder theory and the resource-based view theory. Companies with environmentally friendly commitments can be a strategy in creating higher firm value.

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