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Environmental Costs, Performance, and CSR Disclosure Effects on Energy Companies’ Profitability

2024-05-27
Published
1-14
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MH
Muhammad Rahman Hakim
Accounting Study Program, Faculty of Economics and Business, Panca Sakti University, Bekasi, West Java
ZZ
Zaharuddin Zaharuddin
Accounting Study Program, Faculty of Economics and Business, Panca Sakti University, Bekasi, West Java
SS
Supriyadi Supriyadi
Accounting Study Program, Faculty of Economics and Business, Panca Sakti University, Bekasi, West Java
Abstract

Purpose: This study aims to examine the effect of environmental costs, environmental performance, and Corporate Social Responsibility (CSR) disclosure on profitability of energy sector companies listed on the Indonesia Stock Exchange (IDX) during the 2022–2024 period.
Research Methodology: This study applies a quantitative approach using panel data analysis. The research sample consists of 16 energy sector companies selected through purposive sampling, resulting in 48 firm-year observations. Secondary data were obtained from annual reports, sustainability reports, PROPER ratings, and IDX publications. Data analysis was conducted using the Random Effect Model (REM) with supporting classical assumption tests, model selection tests, t-tests, F-tests, and coefficient of determination analysis.

Results: The results show that environmental costs have a negative and significant effect on profitability, indicating that higher environmental expenditures may reduce short-term financial performance. Meanwhile, environmental performance and CSR disclosure have positive but insignificant effects on profitability. Simultaneously, environmental costs, environmental performance, and CSR disclosure do not significantly affect profitability.

Conclusions: This study concludes that sustainability-related practices have not yet provided direct financial benefits for energy companies during the observation period. Effective management strategies are required to transform environmental initiatives into long-term economic value.

Limitations: This study is limited to energy sector companies and a three-year observation period.

Contributions: This research contributes to environmental accounting literature by providing updated evidence regarding sustainability practices and financial performance in Indonesia energy sector, while offering practical insights for managers and investors in balancing environmental responsibility and profitability.

Corporate Social Responsibility Disclosure Environmental Costs Environmental Performance Profitability
How to Cite
Hakim, M. R., Zaharuddin, Z., & Supriyadi, S. (2024). Environmental Costs, Performance, and CSR Disclosure Effects on Energy Companies’ Profitability. Jurnal Teknika Dan Informatika, 4(1), 1-14. https://doi.org/10.52909/jti.v4i1.360
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Hakim, M. R., Zaharuddin, Z., & Supriyadi, S. (2024). Environmental Costs, Performance, and CSR Disclosure Effects on Energy Companies’ Profitability. Jurnal Teknika Dan Informatika, 4(1), 1-14. https://doi.org/10.52909/jti.v4i1.360
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