Environmental performance, environmental disclosure, and firm value: empirical study of non-financial companies at Indonesia Stock Exchange

Abstract

This research is aimed to examine the effect of environmental performance on firm value with environmental disclosure as a mediation variable. Sample of research is non-financial companies at the Indonesia Stock Exchange that have followed the Environmental Performance Assessment Program (PROPER) held by the Ministry of Life Environment and Forestry. The data analysis method is Structural Equation Modeling-Partial Least Square (SEM-PLS), and the analysis operation is facilitated by the software of WarpPLS 6.0. The result of analysis has given a few findings. One is that environmental performance has a positive effect on firm value and environmental disclosure. Other result shows that environmental disclosure does not affect firm value and does not mediate the effect of environmental performance on firm value. In general, all the results support the stakeholder theory and the resource-based view theory. Companies with environmentally friendly commitments can be a strategy in creating higher firm value.