Conducting regular environmental impact assessments

Oct 13, 2025 by talynt.org 63 views

Effect of Environmental Performance and Environmental Disclosure on Economic Performance with Company Size as Moderating Variables in Manufacturing Companies Listed on the Indonesia Stock Exchange in 2017-2021

Introduction

In today's business landscape, companies are increasingly expected to prioritize sustainability and environmental responsibility. This shift in focus has led to a growing interest in the relationship between environmental performance, environmental disclosure, and economic performance. The purpose of this study is to investigate the impact of environmental performance and environmental disclosure on economic performance, with company size as a moderating variable, in manufacturing companies listed on the Indonesia Stock Exchange (IDX) between 2017 and 2021.

Methodology

This study employed a quantitative approach, using secondary data from 16 manufacturing companies listed on the IDX during the period 2017 to 2021. The data was analyzed using descriptive statistical analysis, classical assumption testing, regression testing, hypothesis testing, and moderation regression analysis with the help of SPSS 25 software. The independent variables analyzed were environmental performance and environmental disclosure, while the dependent variable was economic performance. Company size functioned as a moderating variable.

Environmental Performance Analysis and Environmental Disclosure

Environmental performance refers to a company's efforts to manage the impact of operational activities on the environment, including the use of resources, waste management, and sustainability policies. Environmental disclosure, on the other hand, is the extent to which a company provides information to stakeholders regarding their environmental policies and performance. In a business context that increasingly demands sustainability, these two aspects have become increasingly important.

Although the results of this study showed that environmental performance and environmental disclosure did not have a direct impact on economic performance, this does not mean that companies can ignore these aspects. Many stakeholders, including investors and consumers, are now paying attention to how companies are responsible for the environment. Therefore, companies that ignore environmental performance and disclosure may face the risk of reputation that can affect their economic performance in the future.

The Role of Company Size

Company size functions as a moderating variable in this study. This shows that larger companies may have more resources to apply good environmental practices and communicate them effectively to stakeholders. Thus, company size can strengthen the relationship between environmental performance and disclosure and economic performance.

Larger companies tend to have more pressure to make environmental disclosure and improve their performance, because they are more visible to the public and can affect more people. In this context, the size of the company does not only function as a driving factor, but also as a determinant that affects how much impact from the performance and disclosure of the environment on economic performance.

Conclusion

From this study, it can be concluded that although environmental performance and environmental disclosure do not show a direct impact on economic performance, company size plays an important role in moderating this relationship. Therefore, it is essential for companies to not only pay attention to economic performance but also improve the performance and disclosure of the environment, especially for large companies that have greater responsibilities to the community and the environment.

Recommendations

As a step ahead, companies need to be more proactive in integrating aspects of sustainability into their business strategies to ensure sustainable growth. This can be achieved by:

Conducting regular environmental impact assessments to identify areas for improvement and develop strategies to mitigate negative impacts.
Implementing effective environmental disclosure practices to provide stakeholders with accurate and transparent information about their environmental performance.
Investing in sustainability initiatives that promote resource efficiency, waste reduction, and renewable energy.
Developing a culture of sustainability that encourages employees to prioritize environmental responsibility and sustainability.

By taking these steps, companies can not only improve their environmental performance and disclosure but also enhance their economic performance and reputation in the long run.

Limitations of the Study

This study has several limitations that should be acknowledged. Firstly, the sample size was relatively small, consisting of only 16 manufacturing companies listed on the IDX. Secondly, the study relied on secondary data, which may not be comprehensive or up-to-date. Finally, the study focused on manufacturing companies listed on the IDX, which may not be representative of all companies in the manufacturing sector.

Future Research Directions

Future research should aim to:

Investigate the impact of environmental performance and environmental disclosure on economic performance in other industries beyond manufacturing.
Examine the relationship between company size and environmental performance and disclosure in different contexts.
Develop a more comprehensive framework for understanding the relationship between environmental performance, environmental disclosure, and economic performance.

By addressing these limitations and expanding the scope of the study, future research can provide a more nuanced understanding of the complex relationships between environmental performance, environmental disclosure, and economic performance.
Frequently Asked Questions (FAQs) about the Effect of Environmental Performance and Environmental Disclosure on Economic Performance with Company Size as Moderating Variables in Manufacturing Companies Listed on the Indonesia Stock Exchange in 2017-2021

Q: What is the main objective of this study?

A: The main objective of this study is to investigate the impact of environmental performance and environmental disclosure on economic performance, with company size as a moderating variable, in manufacturing companies listed on the Indonesia Stock Exchange (IDX) between 2017 and 2021.

Q: What are the independent variables analyzed in this study?

A: The independent variables analyzed in this study are environmental performance and environmental disclosure.

Q: What is the dependent variable in this study?

A: The dependent variable in this study is economic performance.

Q: What is the role of company size in this study?

A: Company size functions as a moderating variable in this study, which means that it can strengthen or weaken the relationship between environmental performance and environmental disclosure and economic performance.

Q: What are the implications of this study for companies?

A: The findings of this study suggest that companies should not only prioritize economic performance but also improve their environmental performance and disclosure, especially for large companies that have greater responsibilities to the community and the environment.

Q: What are the limitations of this study?

A: The limitations of this study include a relatively small sample size, reliance on secondary data, and a focus on manufacturing companies listed on the IDX.

Q: What are the future research directions suggested by this study?

A: Future research should aim to investigate the impact of environmental performance and environmental disclosure on economic performance in other industries, examine the relationship between company size and environmental performance and disclosure, and develop a more comprehensive framework for understanding the relationship between environmental performance, environmental disclosure, and economic performance.

Q: What are the practical implications of this study for companies and policymakers?

A: The findings of this study suggest that companies should prioritize sustainability and environmental responsibility, and policymakers should consider implementing policies and regulations that promote sustainability and environmental disclosure.

Q: What are the potential benefits of integrating sustainability into business strategies?

A: The potential benefits of integrating sustainability into business strategies include improved economic performance, enhanced reputation, and increased competitiveness.

Q: What are the potential challenges of integrating sustainability into business strategies?

A: The potential challenges of integrating sustainability into business strategies include increased costs, reduced short-term profits, and difficulty in measuring and reporting sustainability performance.

Q: How can companies measure and report their sustainability performance?

A: Companies can measure and report their sustainability performance using various frameworks and tools, such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB).

Q: What are the potential consequences of ignoring environmental performance and disclosure?

A: The potential consequences of ignoring environmental performance and disclosure include damage to reputation, loss of customer trust, and reduced competitiveness.

Q: How can companies improve their environmental performance and disclosure?

A: Companies can improve their environmental performance and disclosure by conducting regular environmental impact assessments, implementing effective environmental disclosure practices, investing in sustainability initiatives, and developing a culture of sustainability.