Environmental Accounting and its Impact to Firm Value: Study of Environmentally Sensitive Companies in Indonesia

  • Diajeng Fitri Wulan Accounting Department, University of Lampung, Indonesia https://orcid.org/0000-0002-6450-6356
  • Reni Oktavia Accounting Department, University of Lampung, Indonesia
  • Usep Syaipudin Accounting Department, University of Lampung, Indonesia
  • Adilah Sabrina Muti’ah Accounting Department, University of Lampung, Indonesia
Keywords: Firm Value, Environmental Cost, Eco-efficiency, CSR, Environmental Performance

Abstract

Purpose: This research aims to explore more about the escalating investor interest in environmental risks and their recognition of a company's environmental performance as pivotal to its long-term viability.

Design/Methodology/Approach: Utilizing multiple regression analysis, we investigate the influence of environmental cost, eco-efficiency, corporate social responsibility (CSR), and environmental performance on a company's value.

Originality: The originality and value of this research lie in its exploration of the increasing investor interest in environmental considerations and their recognition of a company's environmental performance as a key determinant of its long-term viability.

Findings: Our findings reveal a positive impact of these factors on overall company value, suggesting that improvements in environmental performance, eco-efficiency, and transparent reporting of environmental expenses and CSR contribute significantly to a firm's market valuation.

Practical Implication: This underscores the critical role of open and honest communication about environmental practices in attracting investors and enhancing a company's market standing. The company should highlight the importance of integrating environmentally responsible practices into business strategies for sustained success and investor appeal.  

Limitation and suggestion: Notably, the study is limited to environmentally conscious businesses, signaling the necessity for future research to broaden its scope for a more comprehensive evaluation of these relationships across diverse industries.

Paper Type: Research Paper

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Published
2023-12-17
How to Cite
Wulan, D., Oktavia, R., Syaipudin, U., & Muti’ah, A. S. (2023). Environmental Accounting and its Impact to Firm Value: Study of Environmentally Sensitive Companies in Indonesia. Finance, Accounting and Business Analysis (FABA), 5(2), 113-126. Retrieved from https://faba.bg/index.php/faba/article/view/167
Section
Articles

STATISTICS
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