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Does an Energy Company’s Sensitivity Affect its Performance?: Environmental, Social and Governance Analysis in Coal, Gas, Oil, and Basic Materials Industry Companies

Author

Listed:
  • Dedi Kusmayadi

    (Department of Accounting, Faculty of Economics and Business, Siliwangi University, Indonesia)

  • Irman Firmansyah

    (Department of Accounting, Faculty of Economics and Business, Siliwangi University, Indonesia)

  • Wildan Dwi Dermawan

    (Department of Accounting, Faculty of Economics and Business, Siliwangi University, Indonesia)

  • Kurniawan Kurniawan

    (Department of Accounting, Faculty of Economics and Business, Siliwangi University, Indonesia)

Abstract

This study aims to investigate the relationship between the types of energy companies, namely coal, gas and oil, and their performance levels. In addition, the influence of companies that have high sensitivity to the environment on company performance is also tested. Several important variables were also tested such as social activities, governance, as well as the type of energy company, namely coal, gas and oil. The research was conducted on energy companies and basic material industries listed on the Indonesia Stock Exchange from 2018 to 2021. The method used is multiple regression analysis with a data sample of 154 observations. Four models are used in measuring financial performance, namely ROA, ROE, NPM, and new reduced variables. It was found that environmental activities do not affect performance, including in companies that have high sensitivity. Likewise, social activities and corporate governance proxied by female directors, intensity of board meetings, and board education have no significant effect. On the other hand, liquidity has a positive effect on ROA, DER has a negative effect on ROE and performance reduction results. A unique finding shows that only coal companies have a positive relationship with the performance of companies in the energy sector.

Suggested Citation

  • Dedi Kusmayadi & Irman Firmansyah & Wildan Dwi Dermawan & Kurniawan Kurniawan, 2024. "Does an Energy Company’s Sensitivity Affect its Performance?: Environmental, Social and Governance Analysis in Coal, Gas, Oil, and Basic Materials Industry Companies," International Journal of Energy Economics and Policy, Econjournals, vol. 14(2), pages 234-243, March.
    • Handle: RePEc:eco:journ2:2024-02-23
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    References listed on IDEAS

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    More about this item

    Keywords

    Coal; Gas and Oil; Basic Material; Performance; Environmental Disclosure;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels

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