THE EFFECT OF ENVIRONMENTAL COSTS, GREEN ACCOUNTING, ENVIRONMENTAL RESPONSIBILITY DISCLOSURE, AND CAPITAL STRUCTURE ON FINANCIAL PERFORMANCE (A STUDY OF ENERGY SECTOR COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE 2019-2022 PERIOD)

Abstract

This study aims to examine the effect of environmental costs, green accounting, environmental responsibility disclosure, and capital structure on the financial performance measured by the proxy of Return on Equity (ROE). The samples include 68 energy sector companies listed on the Indonesia Stock Exchange (IDX) between 2019 and 2022 selected through purposive sampling technique and analyzed by descriptive analysis and multiple linear regression. The results exhibit that environmental costs and green accounting have a negative but insignificant effect on financial performance which may be caused by other factors. In contrast, environmental responsibility disclosure has a positive significant effect, and capital structure is found to have a negative significant effect on financial performance. This study does not fully support legitimacy and stakeholder theories for several reasons. Companies need to increase attention to environmental issues through proper implementation of green accounting and maintain the proportion of their capital structure to gain positive sentiment from the public.