East Asian Journal of Multidisciplinary Research (EAJMR)

Vol.2, No.12, 2023: 5135-5152

The Impact of Green Accounting Implementation and

Environmental Performance on Corporate Financial Performance
Nurfaidah1*, Andi Syarifuddin2,Bunyamin3, Andi Hadidu4
STIE –YPUP Makassar
Corresponding Author: Nurfaidah nurfaidahypup67@gmail.com

ARTICLEINFO ABSTRACT
Keywords: Green Accounting, This study aims to identify and analyze the impact
Environmental Performance, of green accounting implementation and
Financial Performance
environmental performance on corporate financial
Received : 12, October performance. The population of this study is
Revised : 18, November manufacturing companies in the basic industry
Accepted: 24, December and chemical sectors that will be listed on the
©2023 Nurfaidah, Syarifuddin,
Indonesia Stock Exchange in 2021-2022. The
Bunyamin, Hadidu: This is an open- sample was selected using a purposive sampling
access article distributed under the method with three criteria, resulting in 15
terms of the Creative Commons companies worth observing. This study uses
Atribusi 4.0 Internasional.
multiple regression analysis using the SPSS
program. In this study, green accounting variables
are measured using the dummy method,
environmental performance variables are
measured using PROPER evaluation values, and
financial performance variables are measured
using ROA. Based on the analysis results, it is
shown that green accounting and environmental
performance variables do not affect the financial
performance of companies.

DOI prefix: https://doi.org/10.55927/eajmr.v2i12.7323 5135

( ISSN-E: 2828-1519
https://journal.formosapublisher.org/index.php/eajmr
Nurfaidah, Syarifuddin, Bunyamin, Hadidu

INTRODUCTION
In the current millennial generation, we have certainly caught up with
the rapid advances in technological development and are able to compete
globally, and the modern economy is becoming increasingly sophisticated,
which can lead to various problems related to environmental degradation. there
is. The environmental damage caused by corporate business activities is
beginning to draw attention to society. The activities planned to be carried out
by the company cannot be separated from the surrounding community.
(Agustia, 2021) Considering the importance of following the development of a
modern economy like today, various issues related to the environment such as
global warming, eco-efficiency and other industrial activities that have a direct
impact on the surroundings. It's surfacing. environment. As corporate activities
have a greater impact on environmental issues and nature conservation, the
accounting field plays a role in environmental conservation efforts through
voluntary disclosure in financial reports about environmental costs
(Panggabean and Deviarti, 2022) .
In the financial field, including accounting, we are of course actively
engaged in environmental conservation activities called green accounting
(environmental accounting). The concept of green accounting began to develop
in Europe from the 1970s. In terms of the definition of green accounting, it is an
activity that allows the collection, analysis, estimation and reporting of both
environmental and financial data, taking advantage of environmental impact
and cost reduction (Cohen and Robbins 2021: 190 in Aniela , 2022). Apart from
that, in the sense of green accounting, it is also the first solution to
environmental problems. Applying green accounting provides the motivation
that companies can minimize the environmental problems they face. (Hamidi,
2019).
One of the objectives regarding the application of environmental
accounting is to increase the efficiency of environmental management by
implementing environmental activities from the perspective of cost and use or
effectiveness (Santi, 2020). Pramelasari (2021) describes management as an
organization that is carried out by carrying out a program of activities
considered important by stakeholders and reporting these activities to
stakeholders. Zulhaimi (2021) believes that the awareness of the industry is low
regarding the introduction of green industries through green accounting.
Because universally, it's like two sides of the same coin, benefiting the industry
on the one hand and potentially benefiting the other. This leads to increased
costs through environmental costs.
This will be an important part of the discussion as we work to implement
environmental management as a corporate concern. This is especially true for
companies involved in the manufacturing industry. Meiyana and Aisyah (2019)
argue that it is undeniable that manufacturing companies leave behind waste
during the production process, and if waste is not treated in such a way,
companies contribute to the environment by polluting the waste. It says that it
will become. Apart from implementing green accounting, there is also the
application of environmental performance within companies. Environmental

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performance is translated as performance regarding the environment, especially
its impact on the environment (Putri and Herawati, 2017). Environmental
performance can be verified through the measurement of environmental
management systems related to the control of environmental aspects.
Since 2002, among the initiatives that the government can implement
through the Ministry of Environment (KLH), it has established and enhanced
the role of the Program for the Evaluation and Evaluation of Enterprise
Performance in Environmental Management (PROPER) in the field of
controlling environmental impacts. Enterprises on Environmental Protection
Programs (Setyaningsih and Asyik, 2021).
A company's valuation is looked at from the company's performance,
especially its financial performance, and its value is obtained in terms of how
much profit it has made. We use profit as a parametric measure of financial
performance because profit is important and highly prioritized for the survival
of a company. In order to maximize profits, some companies ignore the impact
of their activities, including the impact on the environment and surrounding
communities. As time goes on, importantly, he says Rustiarini (2021),
companies will face not a single bottom line, but a triple bottom line. This
means that the business goal carried out by companies is not only to earn
profits, but also to improve the welfare of society (people) and protect the
environment (earth).
Siregar et al. (2019) study results show that environmental cost variables
do not affect financial performance (ROA), while environmental performance
affects financial performance (ROA). There are differences in research. The
research results of Setyaningsih and Asyik (2021) show that environmental
performance does not have a positive impact on financial performance, and
PROPER interacting with CSR does not have a positive impact on financial
performance. Since there are inconsistent differences in the results among
several researchers, the authors want to prove it again using independent
variables, namely green accounting and environmental performance, and
dependent variables, namely financial performance. thinking about. In
addition, the difference between the previous and current research is the
difference in the survey target and research period.This research targets the
manufacturing industry in the basic industry and chemical field, and the
research period is from 2019 to 2021. . Previous studies targeted the
manufacturing industry, but other fields and mining companies in general were
surveyed, and the period was over two years, so there were differences in
sampling and data analysis. In this study, data analysis was performed using
hypothesis testing including coefficients. decision and t-test.
The application of green accounting and environmental performance that
is part of this sustainability report allows researchers to conduct further studies.
This study aims to analyze the extent to which the application of green
accounting and environmental performance will affect the financial
performance of manufacturing companies in the basic industries and chemical
sectors listed on the IDX from 2021 to 2022 . The researchers are interested in
conducting a study with the title “The impact of green implementation

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accounting and environmental performance on corporate financial

performance”. Research Objectives 1. To analyze whether green accounting has
an impact on the financial performance of manufacturing companies in the
basic industry and chemical sectors listed on the BEI from 2021 to 2022. 2.
Analyze whether environmental performance affects financial performance.
Performance of listed manufacturing companies in the basic industries and
chemical sectors for the BEI period 2021-2022.

THEORETICAL REVIEW
This theoretical research argues that companies make efforts and
business activities not only for their own benefit but also for the benefit of their
stakeholders. Therefore, this stakeholder theory study is a tactic that companies
use to maintain relationships with stakeholders or stakeholders themselves,
including investors, governments, creditors, employees, suppliers, customers,
and society, including the environment. Pramelasari (2021) explains that an
organization's management is expected to carry out activities that are
considered important by stakeholders
We also report these activities to stakeholders. Since a company's
business activities are supported by the stakeholders themselves, stakeholders
have an obligation to receive reports on a company's environmental efforts.
This theoretical study also states that all stakeholders have the right to be
provided with information about what role a company's organizational
activities play in the surrounding environment.

Legitimacy Theory
In this grand study, legitimacy theory states that a company's
management system is oriented to take the side of society, government,
individuals, and community groups (Rawi, 2021). This theory is part of the
theory that motivates companies to submit sustainability reports. The
advantage of this theory is that it can evaluate the organizational behavior of
companies and limit it through norms in environmental considerations. This
can be used as a means of formulating corporate strategy, especially in relation
to the company's position in an increasingly advanced society.

Green Accounting
Green accounting, also known as green accounting or green accounting,
is a type of accounting that seeks to include and relate environmental cost
factors to corporate activities. Cohen and Robbins (2021) Green accounting or
environmental accounting is defined as: "A style of accounting that includes
indirect costs" This means that environmental accounting is a type of
accounting that includes indirect costs and benefits from economic activities,
such as the environmental and health effects of business plans and plans.
means. decision. Apart from that, environmental accounting is accounting that
identifies, measures, evaluates and details.
Costs - costs associated with a company's actions towards the
environment (Aniela, 2022). Environmental accounting is also similar to a
quantitative measurement framework for environmental conservation activities

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carried out by companies (Suartana, 2021). Green accounting is a method of
reporting the impact that a company's management activities have on the
environment by including it in financial reports. Ningsih and Rachmawati
(2021) Green Accounting, or accounting, aims to link the environmental budget
and business operating funds. Green accounting also provides opportunities to
reduce energy and natural resources, reduce health risks, and promote
competitive advantage for companies. In this way, green accounting is an effort
to improve the economics of a company without ignoring the state of the
surrounding environment.
Green accounting is carried out by companies to create an evaluation of
data in the form of numbers regarding costs and environmental impact. The
benefits of environmental accounting concepts for companies facilitate the
ability of companies to minimize the environmental problems they face
(Nuryanti et al., 2021). Green accounting solutions for companies are a form of
corporate responsibility towards stakeholders. This is because stakeholders
want to focus not only on financial value, but also on environmental value, that
is, whether a company takes into account the environmental impact of its
operations. . Regulations on Green Accounting, namely Law No. 2 No. 23 of
1997 on Environmental Management. This law regulates the obligations of
everyone who carries out or carries out activities to protect, manage and
provide correct and accurate information about the environment (Hamidi,
2019).

Environmental Costs
Environmental costs are the costs of the impact that an organization's or
company's activities have on the environment. Green accounting is an
accounting model that discloses accounting for environmental costs.
Environmental costs are the costs that companies incur when engaging in
environmental management. Some companies believe that environmental costs
reduce corporate profits. Tunggal and Fachrurrozie (2021) Despite the fact that
the allocation of costs for environmental management shows the consistency of
environmental considerations carried out by companies, thereby building
society's confidence in corporate social responsibility. . Burhany (2021) classifies
environmental costs as: 1. Environmental prevention costs, that is, costs arising
from activities that prevent dirt and production waste from having a negative
impact on the environment. Examples: costs of designing processes/products
that can minimize or eliminate pollution, costs of environmental impact studies,
etc. 2. Environmental detection cost. That is, the costs incurred from activities
that bring products, processes, and other activities within a company into
compliance with established environmental standards. Examples: costs of
auditing environmental activities, costs of conducting tests, pollution, etc. 3.
Environmental internal failure costs, i.e. costs incurred from activities
performed because dirt or waste was generated but not disposed of into the
company's surrounding environment. Examples: costs of treating and disposing
of hazardous waste, costs of recycling leftover materials, etc. 4. Environmental
external disturbance costs, i.e. the costs incurred after dirt and waste are

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disposed of into the environment around the company. These costs are divided
into two parts: Realized external failure costs, i.e. costs incurred and paid by the
company. Examples: costs to conserve damaged land, costs to clean up
contaminated environments, etc. b. Excludes unrealized external failure costs,
i.e. costs incurred and paid by third parties outside the company.
They are included in the group of environmental costs that must be
recognized or charged to a business, even if the costs are usually indirectly
caused by the business. These costs are also called social costs. Examples:
Medical costs for people who become ill due to pollution caused by corporate
activities, costs for losing a healthy environment, etc.

Environmental Performance
Environmental performance is the relationship between a company and
the environment regarding the environmental impact of the resources used, the
environmental impact of organizational processes, the environmental impact of
products and services, recovery of product processing, and compliance with
working environment regulations .
Environmental performance refers to our focus on environmental
conservation and overcoming problems related to negative environmental
impacts resulting from environmental business activities. The results related to
the management of environmental aspects of an environmental management
system are called environmental performance. Environmental performance
refers to the degree of environmental damage caused by business activities.If
the environmental impact is small, the environmental performance is good;
conversely, if the impact of environmental damage caused by environmental
business activities is large, the environmental performance of the company is
poor. It can be said that it is in good condition. If negative, the company's
environmental performance is poor. According to Dewi (2019), companies with
good environmental performance indirectly have good social information,
which can increase their corporate value. This environmental performance is
evaluated through the Program for Corporate Performance Evaluation
(PROPER) conducted by the Ministry of Environment (KLH).

Company Financial Performance

A company's financial performance is an analysis performed with the
purpose of determining how well a company performs its financial activities
with reference to ideal financial execution rules. Corporate performance is a
formal effort undertaken by a company to accurately assess the company's
operational activities performed during a particular period or time period. Spit
et al. (2021) Financial performance is a tool to measure the financial
performance of a company through its capital structure. Fahmi (2018) defines
financial performance as the analysis performed to ascertain the extent to which
a company has properly and accurately implemented its financial
implementation rules. Financial performance describes a company's objectives,
that is, a company's ability to increase its profits by generating profits. Financial
performance is very important to evaluate because it can motivate employees to
achieve organizational goals and follow predetermined standards of behavior,

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thereby generating desired steps and profits. Financial performance is
measured through data obtained from a company's financial reports. Financial
reports are prepared to describe past financial conditions and are used to
predict future financial conditions.

Research Conceptual Model

In their business activities, companies definitely leave behind waste that
can damage the environment. Companies are considered responsible and those
who are able to sustain and overcome the negative effects of this damage are
considered responsible, but this is also a form of corporate responsibility
towards stakeholders such as investors, communities and the environment.
This is in accordance with the stakeholder theory, which states that companies
place importance on their relationships with stakeholders, and stakeholders can
use information to evaluate the company's merits and demerits as seen in the
company's financial reports. Due to the existence of legitimacy theory, that is,
through information about corporate activities, companies can be recognized by
stakeholders and can demonstrate their activities. Reporting a company's
operational activities through an annual report as evidence of a company's
responsibility to
Environmental problems that indicate the limits to the norms and values
that exist in society and the surrounding environment. The voluntary disclosure
of environmental cost accounting in activity information is generally referred to
as green accounting.In applying green accounting, it is a form of corporate
environmental responsibility that is used to ensure that a company is accepted
and favorably received by stakeholders. You are required to make it visible.
(Investors and the public). Apart from implementing green accounting,
companies can also implement environmental performance. Environmental
performance refers to the extent of environmental damage caused by business
activities, and if the resulting environmental damage is small, it can be said that
the company's environmental performance is good. The environmental
performance of enterprises is poor because the damage caused by
environmental business activities has many negative effects.
We report the environmental costs incurred and our activities to improve
environmental performance in our annual financial report, which is information
we disclose to our stakeholders, especially investors. Investors who want to
invest in a company can see not only how much profit the company generates,
but also how much the company cares about the environment around it. The
above information gives investors a positive image of the company, and if this
evaluation is high, investors will definitely want to cooperate with investments
that will contribute to improving the company's profits.

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Development of hypothesis

Green
Accounting

X1
Financial

Performance

Y
Environmental

Performance

X2

Applying Green Accounting to Financial Performance

The application of green accounting in a company proves that the
company is concerned about the environment through the environmental costs
in the financial report that the company issues for the environment.
Environmental accounting is also similar to a quantitative measurement
framework for environmental conservation activities carried out by companies
(Suartana, 2021). If companies view the environment as a corporate strategy to
present a positive image to society and investors, they cannot avoid the costs
they incur on the environment. Green accounting is a type of environmental
accounting that combines environmental benefits and costs of economic
decisions. This economic decision is whether an investor decides to invest in a
company or not. Disclosing environmental costs can demonstrate a company's
business ethics and responsible resource management practices. Based on
previous research, Putri et al (2019) conducted a study showing that
environmental accounting and environmental performance have a significant
impact on ROA profitability, and that environmental accounting and
environmental performance have a significant impact on ROE profitability. The
results were implemented. This differs from the study conducted by Noer
(2019). Noer's findings showed no significant relationship between disclosure
and disclosure.
Environmental accounting and financial performance. Based on the theory
and previous research discussed so far, the information disclosed to
stakeholders is considered to be a legitimate corporate social contribution, and
companies tend to recognize the following; It is believed to have a significant
positive impact on performance. Voluntary environmental disclosures can be
used to maintain a company's legitimacy, especially to its social and political
stakeholders (Sunday 2019). Therefore, the hypotheses of this study are: H1:
Green accounting has a significant impact on financial performance.

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Reflection of Environmental Performance in Financial Performance
Implementing environmental performance can help companies reduce
operational risks, namely environmental pollution, and prevent protests from
stakeholders. Companies that practice environmental performance also
demonstrate their responsibility to their stakeholders. Companies with good
environmental performance are also good news for investors and potential
investors, so investors will react positively through changes in a company's
stock price (Gardana, 2018). A company that obtains an appropriate PROPER
rating can gain a positive image and legitimacy from the environment.The
magnitude of the evaluation that the government gives to companies in terms
of managementIntroducing environmental performance risks, i.e.
environmental pollution, and help prevent protests from stakeholders.
Companies that practice environmental performance also demonstrate their
responsibility to their stakeholders. Companies with good environmental
performance are also good news for investors and potential investors, so
investors will react positively through changes in a company's stock price
(Gardana, 2018). A company that obtains an appropriate PROPER evaluation
can gain a positive image and legitimacy from the environment.The magnitude
of the management evaluation that the government gives to the company.
Maintaining environmental balance increases investor and customer
awareness of a company's products, which can increase a company's profits in
the long run. The research results of Nisa et al (2020) show that green
accounting practices and environmental performance in accordance with PSAK
57 have a significant impact on corporate profitability. Therefore, the
hypotheses of this study are: H2: Environmental performance has a significant
impact on financial performance.

Research Techniques
This study uses quantitative causality research. The population of this
study is manufacturing companies in the basic industry and chemical sectors
listed on the Indonesia Stock Exchange during the period 2021-2022. The total
population is 75 companies. The sampling method was a purposive sampling
method, and a sample of 15 companies was obtained. The sampling criteria are
as follows. 1. Companies listed in the manufacturing industry during 2021-2022.
2. Manufacturing companies for the period 2021-2022 that publish an annual
report. 3. Companies participating in PROPER registered in the manufacturing
companies in the textile and apparel sub-sector for the period 2021-2022.

METHODOLOGY
Data analysis in this study uses descriptive statistical analysis methods.
Descriptive statistics is the analysis of data by describing the collected data as
is, without the intention of drawing conclusions that apply to the general
public. According to Ghozali (2012), descriptive statistical analysis is the
provision of an overview or description of data in terms of mean (average),
standard deviation, variance, maximum, and minimum values. Descriptive
analysis is a study performed to determine the values of independent and
dependent variables. The descriptive analysis in this study is to describe and

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characterize the data from the sample used using the following variables: green
accounting (X1), environmental performance (X2), and financial performance
(Y). Before testing the hypothesis, classical hypothesis testing and linear
regression are first tested to avoid errors.

RESULTS
Narrative Analysis
Statistical data are obtained based on the processed data using SPSS
software and descriptive analysis is performed to provide an overview or
explanation of the statistical data from the collected samples. Descriptive
statistical analysis describes the distribution of data in terms of minimum,
maximum, mean (average), and standard deviation values for each study
variable indicator. Below is a description of the study variables with descriptive
statistics.

Table 1. Results of study variables with descriptive statistics.

Descriptive Statistics
N Minimun Maximun Mean
Std.Deviation
financial performance 30 ,0029 ,1646 ,053093
,0570075
Green Accounting 30 0 1 67 ,479
Work environment 30 3 4 3,27 ,450
Valid N Listiwese 30
Source: SPSS output

Green Accounting
Based on the table above, it can be explained that the minimum value of
green accounting is 0 and the maximum value is 1. This shows that the amount
of green accounting for this company ranges from 0 to 1 and the mean (average)
is 0.67. The standard deviation is 0.479. The mean value (average) is greater
than the standard deviation, i.e. 0.67 > 0.479. This means that the distribution of
corporate green accounting is uniform.

Environmental Performance
From the table above, it can be explained that the minimum value of
environmental performance is 3 and the maximum value is 4. This shows that
the environmental performance value of this company ranges from 3 to 4, with
an average value of 3.27. The standard deviation is 0.450. The mean value
(average) is greater than the standard deviation, i.e. 3.27 > 0.450, which means
that the distribution of environmental performance of companies is
homogeneous.

Financial Performance
Based on the above table, it can be explained that the minimum value of
financial performance is 0.0029 and the maximum value is 0.1646. This shows

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that the magnitude of the financial performance of this company ranges from
0.0029 to 0.1646 with a mean (average) of 0.053093 and a standard deviation of
0.0370075. The mean value (average) is greater than the standard deviation, i.e.
0.053093 > 0.0370075. This means that the distribution of financial performance
of companies is uniform.

Testing Model Assumptions

Normality test
Based on the results of normality testing, the result is 0.078, which means
that this figure is greater than the predetermined significant value of 0.05, so it
can be said that the data is normally distributed.

Autocorrelation Test
The value of the Durbin-Watson autocorrelation test is 1.692. Since the
number of samples used in this survey was 15 companies, the lower limit (dl)
was 1.07697 and the upper limit (du) was 1.36054. The Durbin-Watson test is
performed with the condition du<d<4-du, so the result is 1.36054<1.692
<2.63946. These results indicate that the autocorrelation problem does not occur
in the regression model because the D-W value is between the du value and the
4-d value.

Multicollinearity Test
Based on the results of the multicollinearity test, it can be seen that the
variables in this study are not correlated with each other, as their tolerance is
greater than 0.10 and the VIF value is less than 10. Therefore, we can conclude
that there was no sign of multicollinearity.

Heteroskedasticity Test
Based on the results of the heteroskedasticity test by Glejser test, all
significant values are > 0.05, which indicates that there is no heteroscedasticity
in the regression model.

Hypothesis Testing
Multiple Regression Analysis
Multiple regression analysis was conducted to analyze the influence of
independent variables on dependent variables. This statistical analysis method
was chosen because this study was designed to examine the influence of the
independent variable on the dependent variable.

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The results of the multiple regression analysis are as follows.

Table 2. T-statistic test results

Standardized
Unstandarzed Coefficients Coefficients r Sig.
Model

Β Std Error βeta

( Constant ) ,094 ,051 1.825
,079
Green Accounting -011 ,015 -149 -784
,440
Environmental Performance -010 ,016 -122 -645
,524

Source: SPSS output

Based on the table above, we get the following multiple regression
equation: ROA = 0.094 – 0.011X1 – 0.010X2 + e The constant value for the
regression model is 0.094. This means that when the independent variable green
accounting environmental performance is 0, financial performance is positive
with a value of 0.094. The regression coefficient value of the green accounting
variable is − 0.011, indicating that the impact of green accounting on financial
performance is in the negative direction. Therefore, when the green accounting
increases by 1, its value decreases. Financial performance is a difference of
0.011. The coefficient value of the environmental performance variable is -0.010,
and the coefficient value has a negative sign, indicating an inverse relationship
between environmental performance and financial performance. These
numbers explain that when environmental performance increases by 1,
financial performance decreases by 0.010.

Coefficient Of Determination Test (Adjusted R2)

The coefficient of determination (R2) is a coefficient that expresses the
amount of variation due to an independent variable, or the magnitude of the
influence that an independent variable has on a dependent variable, expressed
as a percentage. The results of the coefficient of determination test in this study
are shown in the following table.

Table 3. Coefficient Of Determination Test Results

Model R R Square Adjusted R Square Std.Errr of
the
Estimate
1 ,202 1 ,041 -030 ,0375613
Predictor variables (constants), environmental performance, green accounting
b. Fluctuations in financial performance
Source: SPSS output

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Based on the table above, it can be explained that the R-squared coefficient of
determination is 0.041 or 4.1%. This means that variations in the independent
variables used in the model, namely green accounting (X1) and environmental
performance (X2), can influence the dependent variable, namely financial
performance (Y), by 4.1%. On the other hand, the remaining 95.9% is influenced
by other factors other than the variables under study.

Partial Test (T-Test)

This test was performed to measure the extent to which each
independent variable influences the dependent variable, which was tested at a
significance level of 0.05. The result of the t-statistic test is:

Table 4. T-statistic test results

Standardized
Unstandarzed Coefficients Coefficients r
Sig.
Model

Β Std Error βeta

( Constant ) ,094 ,051 1.825
,079
Green Accounting -011 ,015 -149 -784
,440
Environmental Performance -010 ,016 -122 -645
,524

Source: SPSS output

Based on the above t-test results, it can be seen that the significance value
of the green accounting variable is 0.440, which is greater than 0.05. This means
that H0 is accepted and H1 is rejected. Therefore, we can conclude that it is not
green accounting. It has a significant impact on the level of financial
performance of a company. Source: SPSS output.
The significance value of the environmental performance variable is
0.524, which is greater than 0.05, indicating that H0 is accepted and H2 is
rejected. This indicates that environmental performance does not have a
significant impact on a company's financial performance.

DISCUSSION
The Impact of Green Accounting on Financial Performance
The first hypothesis of this study is that green accounting will affect the
financial performance of manufacturing companies in the basic industries and
chemical sectors listed on IDX from 2021 to 2022, based on the presented
analytical results. , the significance value is calculated. 0.440 is greater than the
0.05 significance level (0.440 > 0.05). These results indicate that green
accounting does not have a significant impact on firms' financial performance.
This shows that companies whose sole purpose is to increase profits will

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consider all costs incurred, including environmental costs that reduce the size
of profits. This is according to a study by Tunggal and Fachrurrozie (2021) who
state that when companies manage the environment, they allocate costs
through environmental disclosure or environmental costs, which can cause a
reduction in corporate profits. This is because some companies record
environmental costs as administrative expenses or general expenses.
Environmental costs, which are considered voluntary costs as investment
expenditures in annual reports and sustainability reports, will gain social
legitimacy in the future and will indirectly be recognized by stakeholders as a
company that shows consideration for the surrounding environment. This is
because it gives a positive image. If a company has a good image in terms of
environmental management, it will be accepted by society. On the other hand, if
a company is less concerned about the environment, it is less likely to adopt it.
Therefore, only companies with positive information are ready to disclose their
environmental activities (Sulistiawati & Dirgantari, 2021).

Additionally, this environmental cost information is influenced by a company's

industry, i.e., whether it is well-known or low-profile. Well-known companies
with high consumer recognition are

reveal more environmental costs compared to companies in lesser-

known industry categories (Siregar et al., 2019). Therefore, the introduction of
green accounting does not have a significant impact on the company's financial
performance. This finding is consistent with the finding of Faizah (2020) which
shows that green accounting has no impact on financial performance. In order
to implement green accounting through environmental activities and produce
environmentally friendly products for consumption by the public, it is
necessary not only to obtain a PROPER rating, but also to allocate
environmental costs. The existence of environmental costs reduces profits and is
therefore considered a burden on companies. Companies should consider
environmental costs to be investment expenditures because they can provide
social legitimacy and green recognition from governments and society.
However, this is inconsistent with the study of his Putri et al. (2019) found that
1) green accounting and environmental performance have a significant impact
on the profitability of his ROA, 2) green accounting and environmental
performance have a significant impact on the profitability of his ROE. The
better the green accounting disclosure and environmental performance, the
higher the PROPER level, the higher the profitability of the company.

Impact of environmental performance on financial performance

The second hypothesis of this study is that environmental performance
will have a significant impact on the financial performance of manufacturing
companies in the basic industries and chemical sectors listed on the BEI in 2021-
2022. Based on the presented analysis results, we can see that: The significance
value of the environmental performance variable is 0.524 greater than 0.05
(0.524 > 0.05). This indicates that a company's environmental performance does

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Vol. 2, No. 12, 2023: 5135-5152
not have a significant impact on a company's financial performance. The results
of this study show that even if companies carry out environmental management
efforts in accordance with PROPER requirements, they cannot influence
environmental performance through PROPER agents in environmental
management and cannot influence financial performance. Masu. The average
PROPER rating that companies receive is very good, i.e. in the blue category.
The findings of this study are consistent with those of Setyaningsih & Asyik
(2021). The aspects of the PROPER assessment conducted by the Ministry of the
Environment can be interpreted as not directly related to community interests,
and the compliance aspects assessed by the PROPER committee also include
environmental permits, supervisory permits, and the provision of corporate
data, so environmental performance The consequences cannot be directly felt
by the community. This may affect the company's financial performance not
improving. Because for the company's survival, it is very important for the
company to have a positive image, and the company must strive to gain good
legitimacy from the community.
These results are also consistent with the study by Putri & Herawati
(2017), which proves that there is no significant relationship between
environmental performance and corporate financial performance. This study
shows that the information on environmental performance released by the
Ministry of the Environment cannot directly influence financial performance.
Environmental performance is not the most important factor influencing a
company's financial performance. This can be seen from PT. Unilever Indonesia
Tbk. Received a green rating of 4 in 2015.
Gunawan Dianjaya Steel Tbk, rated Red with PT. score 2, has a financial
performance of 15.1%, while its financial performance as measured by ROA is -
9.3%. This indicates that environmental performance is not aligned with
financial performance or does not have a direct impact on financial
performance. This finding is inconsistent with Tahu's (2019) research finding
that environmental performance has a significant impact on financial
performance, while environmental disclosure has no impact on financial
performance. Environmental performance can also be expected. This is a
consideration when considering a company's financial performance. A positive
image of a company increases society's interest in purchasing the company's
products, improves financial performance (increases corporate profits), and
increases stock price and company value due to improved financial
performance. A company's stock thereby attracts investors to invest in the
company.

CONCLUSIONS AND RECOMMENDATIONS

The purpose of this study is to analyze the impact of green accounting
and environmental performance on the corporate financial performance of
manufacturing companies in the basic industry and chemical sectors listed on
the Indonesia Stock Exchange (BEI) for the period 2021-2022. is. From the
analysis performed on the results, two conclusions can be drawn: Source: SPSS
output. The result of the first hypothesis is that green accounting has no effect

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on a company's financial performance. This is because companies whose sole

purpose is to increase profits consider any costs they incur, including
environmental costs, which reduce the amount of profits. There are several
companies that record these environmental costs as administrative expenses or
general expenses, and some environmental costs are voluntarily recorded as
investment expenditures in annual reports in order to gain future social
legitimacy. This is because costs are also taken into account. This indirectly
gives a positive image to companies that care about the surrounding
environment. Therefore, the introduction of green accounting does not have a
significant impact on the company's financial performance. Source: SPSS
output. The result of the second hypothesis is that environmental performance
does not have a significant impact on a firm's financial performance. This study
provides assurance that a company's environmental management activities do
not affect its financial performance and that even if a company carries out its
environmental management efforts in accordance with appropriate
requirements, the financial performance of a company will improve. It shows
that it is not. This is because aspects of the PROPER evaluation do not directly
address the interests of the community and therefore do not give a good image
to the community. Therefore, the implementation of environmental
performance does not have a significant impact on a company's financial
performance. Source: SPSS output. Based on their findings, the researchers have
made several suggestions. In other words, it is hoped that industry players who
implement green accounting and environmental performance will pay more
attention to the community, as a positive image from the community can really
help companies improve their performance. Promote the company's profits,
promote sales growth, increase the company's profits. Investors are expected to
invest more carefully, especially in companies that have social legitimacy and
are evaluated as environmentally friendly companies by the government and
society. This will increase the company's reputation and enhance the company's
image.

FURTHER STUDY
For further research, it is recommended to explore the addition of new
variables in the study to broaden the view of factors that may affect the
relationship between Green Accounting, environmental performance, and
corporate financial performance.

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