The associations between environmental disclosures with financial performance, environmental performance, and firm value
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.
Keywords
Acknowledgements
The corresponding author would like to acknowledge the funding support from the Indonesian Ministry of Research, Education and Higher Education research grant (Hibah DIKTI).
Citation
Deswanto, R.B. and Siregar, S.V. (2018), "The associations between environmental disclosures with financial performance, environmental performance, and firm value", Social Responsibility Journal, Vol. 14 No. 1, pp. 180-193. https://doi.org/10.1108/SRJ-01-2017-0005
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited