Do Green Accounting And Environmental Performance Drive Financial Performance? Evidence From Energy Companies On The Indonesia Stock Exchange

Abstract

The energy sector carries substantial environmental risks that may affect corporate financial outcomes, making sustainability-oriented accounting practices increasingly relevant. This study aims to analyze the effect of green accounting implementation and environmental performance on the financial performance of energy sector companies listed on the Indonesia Stock Exchange (IDX). Green accounting is measured using the natural logarithm of total environmental costs, environmental performance is measured using the GRI environmental disclosure index, and financial performance is proxied by Return on Assets (ROA). This study employs a quantitative approach with a causal research design, using secondary data drawn from companies' annual reports and sustainability reports. Samples were selected through purposive sampling over the study period. The data were analyzed using multiple linear regression with the SPSS program. The results indicate that, partially, green accounting has a positive and significant effect on financial performance, whereas environmental performance has no significant effect on financial performance. Simultaneously, green accounting and environmental performance exert a significant effect on financial performance. These findings suggest that environmental cost management contributes more directly to financial performance than environmental disclosure alone within the energy sector.