The Effect of Environmental Performance and Environmental Cost on Financial Performance with Good Corporate Governance as the Moderating Variable

Abstract

This study aims to examine the influence of the environment and financial performance with good corporate governance as moderation. The independent variables are environmental performance and environmental costs. The measurement of environmental performance used PROPER. The measurement of environmental cost used a cost comparison between the costs of corporate social responsibility and net income. The dependent variable was financial performance as measured by Return on Assets. Good corporate governance was measured using the number of independent boards of commissioners. Quantitative research method was applied by employing WarpPLS application. The samples were manufacturing companies listed on the Indonesia Stock Exchange (BEI) 2017-2019. The results showed that environmental performance and environmental costs had no effect on financial performance. Good corporate governance did not moderate the effect of environmental performance on financial performance. Meanwhile, good corporate governance was able to moderate the effect of costs on the financial performance environment.