Effect of financial and environmental performance on firm value moderated by carbon emission disclosure

Abstract

The development transition in Indonesia is closely related to the exploitation of natural resources and environment. Natural resources and environmental exploitation result in climate change due to the greenhouse gas effect. As one of Indonesia's primary economic growth sources, the energy sector significantly contributes to carbon production. This study aims to analyze carbon emission disclosure as a moderating variable of the effect of financial and environmental performances on the firm's value in energy sector companies. The study's data used secondary data collected from the Indonesia Stock Exchange and the company's website, using 14 listed energy sector companies as the study's sample. The method used was moderated regression analysis (MRA) on panel data from 2019-2023, which was processed using the Eviews 12 software. The results show that the independent variable, including financial performance proxied by return on equity (ROE) and environmental performance, simultaneously and partially significantly impact the company's value. Carbon emission disclosure as a moderating variable can significantly attenuate the influence between financial performance and a firm's value. However, it only has potential and cannot significantly influence the relationship between environmental performance and firm value.