Do Environmental Issues Matter to Investors?

Abstract

This study aims to analyze the effect of the ISO 14001 environmental management system, corporate environmental disclosure, and company performance. The research samples used were non-financial companies listed on the Indonesia Stock Exchange for 2018-2019. The sampling technique employed was purposive sampling with a total research sample of 230. The analytical tool utilized in this study was regression analysis using the SPSS Process. The study results indicate that ISO 14001 environmental management influenced corporate environmental disclosure, but corporate environmental disclosure did not affect company performance. In addition, the ISO 14001 environmental management system had a negative effect on performance. It signifies that corporate environmental disclosure did not mediate the relationship between the ISO 14001 environmental management system and performance.

The Implication of Profitability as a Moderating in the Relation of Environmental Certification and Financial Performance to Market Reaction

“…Investors assume that ISO 14001 certification contradicts the main business goal of maximizing shareholder wealth by reducing costs and increasing profits. The company have the motivation to implement ISO 14001 only to increase the recognition of the stakeholders, hence does not provide benefits for investors (Widiastuti, et al, 2022). This study proves that having environmental certification could not impress investors and rise the market's reaction in the next period.…”