The Effect of GHG Emission, Environmental Performance, and Social Performance on Financial Performance of Listed Manufacturing Firms in Indonesia

Rokhmawati, Andewi; Sathye, Milind; Sathye, Suneeta

doi:10.1016/j.sbspro.2015.11.061

Cited by 62 publications

(56 citation statements)

References 20 publications

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“…The above table indicates that the findings generally suggested a negative association between the different types of emissions and corporate financial performance. The outcomes with negative associations agree with the studies of Gallego-Álvarez et al [24,32,33] and Zhang and Wang [25]; however, the findings with positive associations were also supported by Rokhmawati et al [38], Salahuddin et al [2], and Yu et al [35]. Overall, this study produced mixed results, which were indicated by the presence of both positive and negative relationships.…”

Section: Discussionsupporting

confidence: 88%

“…Mao and Zhang [37] explored 12 Chinese business departments (from transportation, machinery, electronic sectors) and argued that low carbon integration enhanced company environmental performance; however, it was found to hinder company financial performance. In addition, Rokhmawati et al [38] analysed the impact of carbon emissions, environmental performance (EP), and social performance (SP) on financial performance (FP) on Indonesian companies; results indicated a positive relationship between carbon emissions and Return on Assets (ROA).…”

Section: Empirical Study Results and The Development Of The Hypothesismentioning

confidence: 99%

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The Impact of Carbon Emissions on Corporate Financial Performance: Evidence from the South African Firms

Ganda

Milondzo

2018

Sustainability

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Abstract:The impact of carbon emissions on corporate financial performance within the African corporate setting has remained open and inconclusive, owing primarily to the unavailability of data. However, this paper examines the effect of carbon emissions (Scope 1, Scope 2, and Scope 1 and 2) on the financial performance (ROE, ROI, and ROS) of 63 South African CDP companies for the 2015 fiscal year. Using multiple regression techniques, the paper found overwhelming evidence of a negative relationship between carbon emissions and corporate financial performance. Thus, results indicate that companies which integrate green investment initiatives designed to lower carbon emissions can effectually manage financial performance. Therefore, the paper provides useful insights on how companies can fully utilise their organisational resources and capabilities as well as gain insight, resulting in a higher environmental and financial performance within a firm.

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Section: Discussionsupporting

confidence: 88%

Section: Empirical Study Results and The Development Of The Hypothesismentioning

confidence: 99%

The Impact of Carbon Emissions on Corporate Financial Performance: Evidence from the South African Firms

Ganda

Milondzo

2018

Sustainability

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“…Qi et al () use a Chinese industrial sector panel to provide the first econometric analysis for China on the effects of EP on FP at the sector level. Also Rokhmawati et al () use a regression model to understand the effect of GHG emissions, EP, and social performance on FP of listed manufacturing firms in Indonesia. These authors introduced control variables, such as total compensation to directors, chief executive officer duality, and women presence on board and found these are statistical significant and as so influence FP.…”

Section: Literature Reviewmentioning

confidence: 99%

The relationship between emissions reduction and financial performance: Are Portuguese companies in a sustainable development path?

Robaina

Madaleno

2019

Corp Soc Responsibility Env

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Companies are increasingly adopting strategies that simultaneously reduce their negative impact on the environment and minimize the extraction of natural and energy resources, used as inputs in their production process. The concern for the sustainable development of countries and regions and environmental sustainability of companies is increasingly present. Nevertheless, does it make up for the increased costs to protect the environment? The objective of this study is to evaluate how the environmental performance (EP) and the financial performance (FP) of companies are related, applying to the specific case of Portuguese companies during the 2008-2016 period.The relationship between pollution and FP reveals to be positive. Still, firms regard EP as additional costs, and these efforts do not seem to be strong enough to lead to a better FP. Both munificence and resource slack are included and reveal to have positive effects over FP and in the EP-FP relationship. Highlights• Pollution and financial performance relationship is positive (negative EP-FP link).• Environmental performance are additional costs; firms favor financial performance.• Munificence and slack have positive effects over financial performance.• Munificent environments provide an opportunity for environmental investments.• Scarce slack resources: less willingness to undertake social-responsible actions. K E Y W O R D S environmental munificence, environmental performance, environmental sustainability, financial performance, Portuguese companies, resource slack

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“…Rokhmawati et al (2015) indicate that for firms to be successful in the long run, they should address their environmental issues, and manage their business efficiently by incorporating climate change into their strategic decisions [66]. In their study, Rokhmawati et al (2015) also suggested that firms must pay attention to the interest of stakeholders, because ignoring their interest will make it difficult for the firm to achieve its financial goals, as the negative reaction of stakeholders is likely to increase costs [66]. Hence, firm financial performance is likely to be affected, if firms are not engaged in sustainable waste management.…”

Section: Firm Financial Performancementioning

confidence: 99%

“…Failing to support environmental issues would make it difficult for the firms to achieve their targets (Rokhmawati et al, 2015) [66]. Song et al (2017) state that management of waste, and other environmental related issues, has externality effects, and most companies regard them as a cost with no clear benefit [68].…”

Section: Firm Financial Performancementioning

confidence: 99%

The Relationship between Waste Management Expenditure and Waste Reduction Targets on Selected JSE Companies

2017

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Waste generation and waste management are critical environmental issues faced by countries all over the world. Furthermore, there are greater environmental, economic, and social demands on firms to reduce the environmental impacts due to environmental problems brought about by their operating activities. There is a current debate as to the financial implications of waste management expenditure on waste reduction targets. This study examines the relationship between waste management expenditure on waste reduction targets, and the impact of waste reduction targets on firms' profitability. This study used the quantitative method that utilizes the multiple regressions method to analyses data from selected South African Johannesburg Stock Exchange's (JSE) Socially Responsible Index (SRI) listed manufacturing and mining firms for ten years (2007)(2008)(2009)(2010)(2011)(2012)(2013)(2014)(2015)(2016). The study tests if there is a relationship between waste management expenditure and waste reduction targets, as well as the impact of waste reduction targets on firms' profitability. Results show that waste reduction targets have a positive, but insignificant, correlation on the profitability of firms, and also indicate that there is a relationship between waste management expenditure and waste reduction targets. The study recommends that firms should focus more on minimizing waste generation to reduce costs.

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The Effect of GHG Emission, Environmental Performance, and Social Performance on Financial Performance of Listed Manufacturing Firms in Indonesia

Cited by 62 publications

References 20 publications

The Impact of Carbon Emissions on Corporate Financial Performance: Evidence from the South African Firms

The Impact of Carbon Emissions on Corporate Financial Performance: Evidence from the South African Firms

The relationship between emissions reduction and financial performance: Are Portuguese companies in a sustainable development path?

The Relationship between Waste Management Expenditure and Waste Reduction Targets on Selected JSE Companies

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