Consistent Environmental Performance: Does It Matter for Achieving Good Financial Performance?

Journal of Economics and Business

ISSN 2615-3726 (Online)

ISSN 2621-5667 (Print)

Published: 13 December 2018

Consistent Environmental Performance: Does It Matter for Achieving Good Financial Performance?

Juniarti, Denvi Novendri Wijaya, Joshua Taruman, Rio Valentino

Petra Christian University, Indonesia

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10.31014/aior.1992.01.04.53

Abstract

This study examines the impact of environmental performance on financial performance in Indonesia. To improve the prior results, this study focuses on companies that consistently achieve good environmental performance and those who do not consistently obtain good performance. The environmental performance measured by environmental ratings that published through a PROPER Program, while the financial performance is measured by return on assets, earning per share, and Tobin's q. Some control variables included in this study such as firm age, firm size, leverage, and market share. The study finds that environmental performance is positive significantly associated with financial performance for the companies that consistently record a good environmental performance. The more consistent the company’s performance in environmental, the higher the association with the financial performance.

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