VALUE RELEVANCE OF CARBON EMISSION DISCLOSURE AND ENVIRONMENTAL PERFORMANCE FOR INVESTOR: EVIDENCE FROM MINING INDUSTRY IN INDONESIA
DOI:
https://doi.org/10.26418/jebik.v13i2.80360Keywords:
environmental performance, carbon emission disclosure, corporate governance, firm valueAbstract
This study analyses the effect of carbon emission reporting and environmental performance on mining companies"™ market value which is listed on the IDX (Indonesian Stock Market). Based on sample criteria, 47 company samples were selected for 5 years (2018 "“ 2022), resulting in 235 data samples. This study employs the panel data regression method which is processed using Eviews software. Before data analysis, a model selection test was carried out, and the fixed effect model was chosen as the best fit. The data model"™s feasibility was then tested using classical assumption tests. This investigation reveals a negative correlation between environmental performance and firm value, indicating that environmental performance does not enhance company value. However, voluntary carbon emissions report a positive influence on firm valuation. This research contributes to the literature on corporate environmental responsibilities and their impact on various stakeholders.
JEL: G30, G32.
References
Aboud, A., & Diab, A. (2018). The Impact of Social, Environmental and Corporate Governance Disclosures on Firm Value: Evidence from Egypt. Journal of Accounting in Emerging Economies, 8(4), 442–458. https://doi.org/10.1108/JAEE-08-2017-0079
Aryani, Y. A., & Setiawan, D. (2020). Corporate Social Responsibility dan Kinerja Perusahaan: Studi pada Perusahaan yang Terdaftar di Jakarta Islamic Index. Matrik: Jurnal Manajemen, Strategi Bisnis dan Kewirausahaan, 14(1), 1–9. https://doi.org/10.24843/MATRIK:JMBK.2020.v14.i01.p01
Asyifa, D. A., & Burhany, D. I. (2022). Carbon Emission Disclosure and Environmental Performance Effect on Firm Value. International Journal of Arts and Social Science, 5(7), 193–203. www.ijassjournal.com
Basuki, A. T., & Prawoto, N. (2019). Analisis Regresi dalam Penelitian Ekonomi dan Bisnis (Dilengkapi Aplikasi SPSS dan Eviews). PT Rajagrafindo Persada, Depok, 18, 1–52.
Bongiovanni, A., & Fiandrino, S. (2024). Does Firm Environmental Performance Mitigate the Market Reaction to COVID-19 Uncertainty? Research in International Business and Finance, 68, 102193. https://doi.org/10.1016/j.ribaf.2023.102193
Castro, P., Gutiérrez-López, C., Tascón, M. T., & Castaño, F. J. (2021). The Impact of Environmental Performance on Stock Prices in the Green and Innovative Context. Journal of Cleaner Production, 320. https://doi.org/10.1016/j.jclepro.2021.128868
Choi, B. B., Lee, D., & Psaros, J. (2013). An Analysis of Australian Company Carbon Emission Disclosures. Pacific Accounting Review, 25(1), 58-79. https://doi.org/10.1108/01140581311318968
Choi, H., Han, I., & Lee, J. (2020). Value Relevance of Corporate Environmental Performance: A Comprehensive Analysis of Performance Indicators Using Korean Data. Sustainability (Switzerland), 12(17), 7209. https://doi.org/10.3390/su12177209
Dwianto, A., Puspitasari, D., A’yun, A. Q., Sulistyawati, A. I., & Pugara, A. (2024). Sustainability Environmental Performance Future Investment for Company Value. Journal of Ecohumanism, 3(2), 233–250. https://doi.org/10.33182/joe.v3i2.3193
Fauzi, T. H. (2022). The Effect of Environmental Performance on Firm Value with Mediating Role of Financial Performance in Manufacturing Companies in Indonesia. Academic Journal of Interdisciplinary Studies, 11(3), 256–265. https://doi.org/10.36941/ajis-2022-0081
Field, A. (2009). Discovering Statistics Using SPSS, 3rd ed. Sage Publishers.
Gerged, A. M., Zahoor, N., & Cowton, C. J. (2024). Understanding the Relationship between Environmental Management Accounting and Firm Performance: The Role of Environmental Innovation and Stakeholder Integration – Evidence from a Developing Country. Management Accounting Research, 62(February 2021). https://doi.org/10.1016/j.mar.2023.100865
Hardiyansah, M., Agustini, A. T., & Purnamawati, I. (2021). The Effect of Carbon Emission Disclosure on Firm Value: Environmental Performance and Industrial Type. Journal of Asian Finance, Economics and Business, 8(1), 123–133. https://doi.org/10.13106/jafeb.2021.vol8.no1.123
Haryono, U., Iskandar, R., Paminto, A., & Ulfah, Y. (2016). Sustainability Performance: It’s Impact on Risk and Value of the Firm. Corporate Ownership and Control, 14(1Continued1), 278–286. https://doi.org/10.22495/cocv14i1c1p11
Ika, S. R., Puisi, P. U. I. S. I., Vitaningsih, C. W., Ducati, D., & Widagdo, A. K. (2024). Carbon Emission Disclosure in the Agriculture Industry in Indonesia: The Determinant Factors. IOP Conference Series: Earth and Environmental Science, 1290(1). https://doi.org/10.1088/1755-1315/1290/1/012033
Ika, S. R., Nurhidayati, Nugroho, J. P., & Widagdo, A. K. (2023). Firm Value, Financial Performance, and Corporate Social Responsibility in the Indonesian Banking Industry (Issue May). Atlantis Press International BV. https://doi.org/10.2991/978-94-6463-160-9_8
Jiang, C., & Fu, Q. (2019). A Win-Win Outcome between Corporate Environmental Performance and Corporate Value: From the Perspective of Stakeholders. Sustainability (Switzerland), 11(3), 921. https://doi.org/10.3390/su11030921
Jizi, M. I., Salama, A., Dixon, R., & Stratling, R. (2014). Corporate Governance and Corporate Social Responsibility Disclosure: Evidence from the US Banking Sector. Journal of Business Ethics, 125(4), 601–615. https://doi.org/10.1007/s10551-013-1929-2
Jung, Y. L., & Yoo, H. S. (2023). Environmental, Social, and Governance Activities and Firm Performance: Global Evidence and the Moderating Effect of Market Competition. Corporate Social Responsibility and Environmental Management, 30(6), 2830–2839. https://doi.org/10.1002/csr.2518
Khanifah, K., Udin, U., Hadi, N., & Alfiana, F. (2020). Environmental Performance and Firm Value: Testing the Role of Firm Reputation in Emerging Countries. International Journal of Energy Economics and Policy, 10(1), 96–103. https://doi.org/10.32479/ijeep.8490
Milne, M. J., & Gray, R. (2013). W(h)ither Ecology? The Triple Bottom Line, the Global Reporting Initiative, and Corporate Sustainability Reporting. Journal of Business Ethics, 118(1), 13–29. https://doi.org/10.1007/s10551-012-1543-8
Napitupulu, R. B., Simanjuntak, T. P., Hutabarat, L., Damanik, H., Harianja, H., Sirait, R. T. M., & Tobing, C. E. R. L. (2021). Penelitian Bisnis, Teknik dan Analisa dengan SPSS-STATA-Eviews. Madenatera.
Ott, C., & Schiemann, F. (2023). The Market Value of Decomposed Carbon Emissions. Journal of Business Finance and Accounting, 50(1–2), 3–30. https://doi.org/10.1111/jbfa.12616
Prior, S., Campbell, S., Greenwood, M., Shearer, T., Walker, K., & Young, S. (2020). Purposive Sampling: Complex or Simple? Research Case Examples. Journal of Research in Nursing, 25. https://doi.org/10.1177/1744987120927206
Rahman, M. M., & Howlader, M. S. (2022). The Impact of Research and Development Expenditure on Firm Performance and Firm Value: Evidence from a South Asian Emerging Economy. Journal of Applied Accounting Research, 23(4), 825–845. https://doi.org/10.1108/JAAR-07-2021-0196
Salbiah, & Mukhibad, H. (2018). Carbon Emission Disclosure and Profitability – Evidence from Manufacture Companies in Indonesia. KnE Social Sciences, 3(10), 53. https://doi.org/10.18502/kss.v3i10.3118
Sari, R. H. D. P., & Sutopo, B. (2023). Impact of Environment Performance on Firm Value: Evidence from Indonesia. International Journal of Management and Sustainability, 12(2), 259–270. https://doi.org/10.18488/11.v12i2.3365
Sawitri, A. P., & Setiawan, N. (2019). Analisis Pengaruh Pengungkapan Sustainability Report, Kinerja Keuangan, Kinerja Lingkungan terhadap Nilai Perusahaan. Journal of Business & Banking, 7(2), 1–8. https://doi.org/10.14414/jbb.v7i2.1397
Soedjatmiko, S., Tjahjadi, B., & Soewarno, N. (2021). Do Environmental Performance and Environmental Management Have a Direct Effect on Firm Value? Journal of Asian Finance, Economics and Business, 8(1), 687–696. https://doi.org/10.13106/jafeb.2021.vol8.no1.687
Wahyuningrum, I. F. S., Ihlashul’amal, M., Utami, S., Djajadikerta, H. G., & Sriningsih, S. (2024). Determinants of Carbon Emission Disclosure and the Moderating Role of Environmental Performance. Cogent Business and Management, 11(1). https://doi.org/10.1080/23311975.2023.2300518
Widagdo, A. K., Ika, S. R., Neni, M. F., Hasthoro, H. A., & Widiawati. (2023). Does Carbon Emission Disclosure and Environmental Performance Increase Firm Value? Evidence from Highly Emitted Industry in Indonesia. E3S Web of Conferences, 467. https://doi.org/10.1051/e3sconf/202346704002
Yuniarti, R., Soewarno, N., & Isnalita. (2022). Green Innovation on Firm Value with Financial Performance as Mediating Variable: Evidence of the Mining Industry. Asian Academy of Management Journal, 27(2), 41–58. https://doi.org/10.21315/aamj2022.27.2.3
Zheng, X., Lu, Y., Ma, C., Yuan, J., Stenseth, N. C., Hessen, D. O., Tian, H., Chen, D., Chen, Y., & Zhang, S. (2023). Greenhouse Gas Emissions from Extractive Industries in a Globalized Era. Journal of Environmental Management, 343, 118172. https://doi.org/10.1016/j.jenvman.2023.118172
ADDITIONAL REFERENCES
ISO. (2015). ISO 14001:2015 Environmental management systems — Requirements with guidance for use (3rd ed.). The International Organization for Standardization.
