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The associations between environmental disclosures with financial performance, environmental performance, and firm value

Author

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  • Refandi Budi Deswanto
  • Sylvia Veronica Siregar

Abstract

Purpose - This study aims to investigate both the direct and indirect associations of environmental disclosures with financial performance, environmental performance and firm value. Design/methodology/approach - The samples are companies listed on the Indonesia Stock Exchange in the agriculture industry, mining industry, basic industry and chemicals, miscellaneous industry and consumer goods industry and that are participating in the Performance Rating Assessment Program on Environment Management (PROPER/Program Penilaian Peringkat Kinerja Perusahaan) of the Ministry of the Environment Republic of Indonesia or have been awarded the Green Industry Award by the Ministry of Industry Republic of Indonesia in 2012-2014. Data are collected from sustainability reports, annual reports and annual financial statements. The authors used simultaneous equation modeling and panel data regression analysis to analyze the data. Findings - The authors find that the financial performance does not affect the environmental disclosures. The lagged environmental performance has a positive effect on the current environmental disclosures, and environmental disclosures do not affect the firm market value and do not mediate the effect of financial performance and environmental performance on firm value. Originality/value - This study comprehensively examines both direct and indirect associations of environmental disclosures with financial performance, environmental performance and firm value, which is rarely examined in extant studies.

Suggested Citation

  • Refandi Budi Deswanto & Sylvia Veronica Siregar, 2018. "The associations between environmental disclosures with financial performance, environmental performance, and firm value," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 14(1), pages 180-193, March.
    • Handle: RePEc:eme:srjpps:srj-01-2017-0005
    DOI: 10.1108/SRJ-01-2017-0005
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    Citations

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    Cited by:

    1. Salvi, Antonio & Vitolla, Filippo & Giakoumelou, Anastasia & Raimo, Nicola & Rubino, Michele, 2020. "Intellectual capital disclosure in integrated reports: The effect on firm value," Technological Forecasting and Social Change, Elsevier, vol. 160(C).
    2. Mumtaheena Anwar & Sohanur Rahman & Md. Nurul Kabir, 2021. "Does national carbon pricing policy affect voluntary environmental disclosures? A global evidence," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 23(2), pages 211-244, April.
    3. Małgorzata Janicka & Artur Sajnóg, 2023. "Do environmental and economic performance go hand in hand? An industrial analysis of European Union companies with the non‐parametric data envelopment analysis method," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2590-2605, September.
    4. Feng-Li Lin, 2021. "R&D Investment, Financial and Environmental Performance Nexuses via Bootstrap Fourier Quantiles Granger Causality Test," Economies, MDPI, vol. 9(2), pages 1-11, May.
    5. Victoria Bogdan & Claudia Diana Sabău-Popa & Marcel-Ioan Boloș & Dorina-Nicoleta Popa & Mărioara Beleneși, 2022. "Tracking Waste Management Information Disclosure Behavior Connected to Financial Performance through Moderating Variables," IJERPH, MDPI, vol. 19(20), pages 1-25, October.
    6. Marika Arena & Giovanni Azzone & Sara Ratti & Valeria Maria Urbano & Giovanni Vecchio, 2023. "Sustainable development goals and corporate reporting: An empirical investigation of the oil and gas industry," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(1), pages 12-25, February.
    7. Regmi, Rupesh & Zhang, Zhuo & Zhang, Hongpeng, 2023. "Entrepreneurship strategy, natural resources management and sustainable performance: A study of an emerging market," Resources Policy, Elsevier, vol. 86(PB).
    8. My Hanh Doan & Remmer Sassen, 2020. "The relationship between environmental performance and environmental disclosure: A meta‐analysis," Journal of Industrial Ecology, Yale University, vol. 24(5), pages 1140-1157, October.
    9. Ali Uyar & Simone Pizzi & Fabio Caputo & Cemil Kuzey & Abdullah S. Karaman, 2022. "Do shareholders reward or punish risky firms due to CSR reporting and assurance?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(5), pages 1596-1620, July.
    10. Andrew Osei Agyemang & Kong Yusheng & Angelina Kissiwaa Twum & Emmanuel Caesar Ayamba & Maxwell Kongkuah & Mohammed Musah, 2021. "Trend and relationship between environmental accounting disclosure and environmental performance for mining companies listed in China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(8), pages 12192-12216, August.
    11. Jia Meng & ZhongXiang Zhang, 2022. "Corporate Environmental Information Disclosure and Investor Response: Empirical Evidence from China's Capital Market," Working Papers 2022.03, Fondazione Eni Enrico Mattei.
    12. Chaudhuri, Ranjan & Chatterjee, Sheshadri & Gupta, Shivam & Kamble, Sachin, 2023. "Green supply chain technology and organization performance: Moderating role of environmental dynamism and product-service innovation capability," Technovation, Elsevier, vol. 128(C).
    13. Muslichah Muslichah, 2020. "The effect of environmental and social disclosure on firm value with financial performance as intervening variable," Jurnal Akuntansi dan Auditing Indonesia, Accounting Department, Faculty of Business and Economics, Universitas Islam Indonesia, vol. 24(1), pages 22-32, Juni.
    14. Angela Patrícia Bovolini Pedron & Clea Beatriz Macagnan & Davi Souza Simon & Daniel Francisco Vancin, 2021. "Environmental disclosure effects on returns and market value," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(3), pages 4614-4633, March.
    15. Meng, Jia & Zhang, ZhongXiang, 2022. "Corporate environmental information disclosure and investor response: Evidence from China's capital market," Energy Economics, Elsevier, vol. 108(C).
    16. Dien Ajeng Fauziah & Eko Ganis Sukoharsono & Erwin Saraswati, 2020. "Corporate social responsibility disclosure towards firm value," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 9(7), pages 75-83, December.
    17. Marius Sorin Dinca & Mara Madaleno & Mirela Camelia Baba & Gheorghita Dinca, 2019. "Environmental Information Transparency—Evidence from Romanian Companies," Sustainability, MDPI, vol. 11(18), pages 1-22, September.
    18. Milind Kumar Jha & K. Rangarajan, 2020. "Analysis of corporate sustainability performance and corporate financial performance causal linkage in the Indian context," Asian Journal of Sustainability and Social Responsibility, Springer, vol. 5(1), pages 1-30, December.
    19. Victoria Bogdan & Luminita Rus & Dana Simona Gherai & Adrian Gheorghe Florea & Nicoleta Georgeta Bugnar, 2023. "A Streamline Sustainable Business Performance Reporting Model by an Integrated FinESG Approach," Sustainability, MDPI, vol. 15(24), pages 1-26, December.
    20. Xiao Liu & Huanxue Pan & Weixing Lin & Mengkai Wang & Qiange Zhang, 2024. "Sustainable Practices and Performance of Resource-Based Companies: The Role of Internal Control," Sustainability, MDPI, vol. 16(4), pages 1-14, February.
    21. Milind Kumar Jha & K. Rangarajan, 2020. "The approach of Indian corporates towards sustainable development: An exploration using sustainable development goals based model," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(5), pages 1019-1032, September.
    22. Constantinescu Daniela, 2021. "Sustainability disclosure and its impact on firm's value for Energy and Healthcare industry," Central European Economic Journal, Sciendo, vol. 8(55), pages 313-329, January.

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