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

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    Abstract

    The study aims to understand the effect of GHG emissions, environmental performance (EP), and social performance (SP) on financial performance (FP) of listed manufacturing firms in Indonesia. Sampling was based on the availability of the firms’ annual reports 2011 and interview feedback about the type and amount of fossil fuels and electricity consumed by the firms in 2011. Firm FP was measured in return on assets (ROA). GHG emissions were measured in CO2e intensity. Firm EP was measured in a dummy variable of PROPER rating. Firm SP was measured as social reporting scores developed through a content analysis. We found that CO2e intensity and social reporting scores have a positive and significant effect on ROA. The coefficient of PROPER rating was not significant.
    Original languageEnglish
    Pages (from-to)461-470
    Number of pages10
    JournalProcedia: Social and Behavioral Sciences
    Volume211
    DOIs
    Publication statusPublished - 2015

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    Fossil Fuels
    Annual Reports
    Electricity
    Indonesia
    manufacturing
    Interviews
    firm
    Federal Government Report on Social Policy
    performance
    assets
    rating
    annual report
    electricity
    content analysis
    interview

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    title = "The Effect of GHG Emission, Environmental Performance, and Social Performance on Financial Performance of Listed Manufacturing Firms in Indonesia",
    abstract = "The study aims to understand the effect of GHG emissions, environmental performance (EP), and social performance (SP) on financial performance (FP) of listed manufacturing firms in Indonesia. Sampling was based on the availability of the firms’ annual reports 2011 and interview feedback about the type and amount of fossil fuels and electricity consumed by the firms in 2011. Firm FP was measured in return on assets (ROA). GHG emissions were measured in CO2e intensity. Firm EP was measured in a dummy variable of PROPER rating. Firm SP was measured as social reporting scores developed through a content analysis. We found that CO2e intensity and social reporting scores have a positive and significant effect on ROA. The coefficient of PROPER rating was not significant.",
    keywords = "GHG emissions, environmental performance, social performance, financial performance, Indonesian listed manufacturing firms.",
    author = "Milind SATHYE and Suneeta SATHYE",
    year = "2015",
    doi = "10.1016/j.sbspro.2015.11.061",
    language = "English",
    volume = "211",
    pages = "461--470",
    journal = "Procedia - Social and Behavioral Sciences",
    issn = "1877-0428",
    publisher = "Elsevier BV",

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    AU - SATHYE, Milind

    AU - SATHYE, Suneeta

    PY - 2015

    Y1 - 2015

    N2 - The study aims to understand the effect of GHG emissions, environmental performance (EP), and social performance (SP) on financial performance (FP) of listed manufacturing firms in Indonesia. Sampling was based on the availability of the firms’ annual reports 2011 and interview feedback about the type and amount of fossil fuels and electricity consumed by the firms in 2011. Firm FP was measured in return on assets (ROA). GHG emissions were measured in CO2e intensity. Firm EP was measured in a dummy variable of PROPER rating. Firm SP was measured as social reporting scores developed through a content analysis. We found that CO2e intensity and social reporting scores have a positive and significant effect on ROA. The coefficient of PROPER rating was not significant.

    AB - The study aims to understand the effect of GHG emissions, environmental performance (EP), and social performance (SP) on financial performance (FP) of listed manufacturing firms in Indonesia. Sampling was based on the availability of the firms’ annual reports 2011 and interview feedback about the type and amount of fossil fuels and electricity consumed by the firms in 2011. Firm FP was measured in return on assets (ROA). GHG emissions were measured in CO2e intensity. Firm EP was measured in a dummy variable of PROPER rating. Firm SP was measured as social reporting scores developed through a content analysis. We found that CO2e intensity and social reporting scores have a positive and significant effect on ROA. The coefficient of PROPER rating was not significant.

    KW - GHG emissions

    KW - environmental performance

    KW - social performance

    KW - financial performance

    KW - Indonesian listed manufacturing firms.

    U2 - 10.1016/j.sbspro.2015.11.061

    DO - 10.1016/j.sbspro.2015.11.061

    M3 - Article

    VL - 211

    SP - 461

    EP - 470

    JO - Procedia - Social and Behavioral Sciences

    JF - Procedia - Social and Behavioral Sciences

    SN - 1877-0428

    ER -