Does Financial Performance Mediate the Impact of Green Accounting and Environmental Performance on Firm Value?

Abstract

Various environmental problems in the world because business activities are not responsible for their activities and their impact on the environment. The responsibility of companies make by paying for their environmental costs can help reduce future costs. This paper aims to examine whether financial performance mediates the impact of green accounting and environmental performance on firm value. The method used is quantitative with a causality design. The sampling method uses purposive sampling to test the relationship between variables. The data used is panel data with a total of 83 companies during 2016 - 2021. The method of analysis in this study uses path analysis. The authors find that green accounting and environmental performance affect financial performance. While green accounting, environmental and financial performance affect firm value. The relationship between green accounting, environmental performance, and firm value is not mediated by financial performance. It shows that the business is increasing environmental costs and participating in the PROPER award can carry out activities that do not directly harm the environment, and the company is environmentally conscious. This condition fits the legitimacy and stakeholder theory. If the business can focus on environmental management, the community will accept it well, and the company will have a good reputation. High trust and loyalty enhance the company's profits and value. This study varies from other research in that it comprehensively examines the effects of green accounting and environmental performance, both direct and indirect, on financial performance and firm value.

The Effect of Family Ownership, Agency Cost, Environmental Performance, Corporate Social Responsibility on Firm Value

“…Conflicts between family members can cause agency costs within the company, which can affect company performance and value. Social and environmental problems due to the company's operational activities are also one of the crises that threaten the lives of living things (Sudimas et al, 2023), which can then affect the company's financial performance and firm value. This can be seen from the case of PT Bintang Warna Mandiri (BWM) in Cimahi City, West Java in 2022 which was proven to have polluted the environment in the Citarum Watershed.…”