Environmental performance, environmental disclosure, and firm value: empirical study of non-financial companies at Indonesia Stock Exchange

Utomo, Mohamad Nur; Rahayu, Sri; Kaujan, Kaujan; Irwandi, Soni Agus

doi:10.3934/gf.2020006

Cited by 54 publications

(38 citation statements)

References 30 publications

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“…From the perspective of environmental protection and sustainable development, previous studies mainly focused on the impact of environmental performance and environmental disclosure on enterprise value (Utomo et al, 2020). Qureshi et al (2020) observe a positive impact of sustainability (environmental, social, and governance) disclosure on enterprise value.…”

Section: Literature Reviewmentioning

confidence: 99%

Does green innovation increase enterprise value?

2021

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Using data from 3212 enterprises in China's A-share market during the 2007-2018 period, this paper investigates the relationship between green innovation (GI) and enterprise value by using ordinary least squares (OLS) and two-stage least squares (2SLS) regression. We find that for every 1% increase in the proportion of the number of the enterprise's green patent applications, the enterprise value (Tobin's Q) will increase by 0.023. Moreover, GI still has a positive lag effect on enterprise value after 2 to 6 years. However, the positive effect of GI on enterprise value may only exist in young non-state-owned enterprises. At the same time, GI has better performance in heavy pollution industries and non-high-tech industries. Moreover, we prove that the improvement of profitability may be a mechanism for GI to affect enterprise value, with a mediating effect accounting for 26.1% of the total effect. The finding on the causal relationship between GI and enterprise value in this study is of great significance for further understanding of the practical value of GI and has certain reference value for the formulation of incentive policies for different industries and enterprises.

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Section: Literature Reviewmentioning

confidence: 99%

Does green innovation increase enterprise value?

2021

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“…Therefore, voluntary disclosure of CER participation is highly subjective and random. Voluntary disclosure can convey information about the firm's core capabilities and show its own advantages [39][40][41]. It is widely recognized that environmental pollution directly and indirectly affects public health and firm production.…”

Section: Corporate Environmental Responsibility and Environmental Pollutionmentioning

confidence: 99%

The Relationship between Environmental Regulation, Pollution and Corporate Environmental Responsibility

Wang

Liao

2021

IJERPH

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The rapid economic development has severely damaged the ecological environment and affected public health. Firms are the main source of pollution; thus, corporate environmental responsibility (CER) has attracted great attention from the government, shareholders and the public. This study used both the fixed effects model and the system GMM (Generalized Method of Moments) model to examine the relationship between environmental pollution, environmental regulations and CER for 30 provinces in China, over the period 2005 to 2015. This study drew the following results: first, mandatory CER disclosure policy can significantly decrease environmental pollution. Second, an inverted U-shaped relationship exists between environmental regulations and environmental pollution. Third, environmental pollution has a positive impact on CER. Fourth, an inverted U-shaped relationship exists between environmental regulations and CER. Therefore, it is necessary to find a balance between environmental regulations affecting environmental pollution and CER so that they can effectively reduce environmental pollution and increase the enthusiasm of firms to carry out environmental responsibility activities.

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“…The literature suggests a linkage between the company's environmental performance and financial stock market performance (Al-Tuwaijri et al, 2005;King and Lenox, 2001;Nur Utomo et al, 2020). ITC competes in many industries and sectors, and the majority of green buildings belongs to ITC hotels' division which has implemented sustainability as a part of its business operations (Boone et al, 2013).…”

Section: Methodsmentioning

confidence: 99%

Investment appraisal and financial benefits of corporate green buildings: a developing economy case study

Verma

Mandal

Robinson

et al. 2021

BEPAM

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PurposeThis case study aims to appraise the financial benefits of green building construction in developing countries. The case study presents, green building's positive net present value (NPV) investment in real terms and potentially enhanced stock market returns at the firm level compared to competitors.Design/methodology/approachThe case study examines secondary data on a green building certification and longitudinal operation costs to estimate green building investments' financial benefits. The case study also compares the stock market performance of green building portfolio company with non-green building competitors of similar size and industry.FindingsThe case study finds out that the real return rate on green building investment is higher than the weighted average cost of capital (WACC) of the company with an inflation-adjusted payback period of fewer than ten years. Findings compare favourably to the extant literature which was mostly in developed economies. The paper further highlights that stock market performance for a green building focused company shows improved returns to shareholders relative to non-green competitors.Research limitations/implicationsThe results are specific to the time and building researched; green buildings costs have reduced over time, and a new study may show improved case study findings. The case study results on stock market performance are indicative and may need further research for evaluation.Practical implicationsThe case study presents a model for critical appraisal of green buildings investment. The paper further indicates that green building investment may lead to operational savings and superior stock performance compared to competitors.Originality/valueThe paper presents a green building investment appraisal model which might be useful for the industry and academia. Developing countries have limited literature on green buildings' financial benefits; this case study quantifies the financial benefits and compares them with the available literature related to developed economies’ green buildings.

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Environmental performance, environmental disclosure, and firm value: empirical study of non-financial companies at Indonesia Stock Exchange

Cited by 54 publications

References 30 publications

Does green innovation increase enterprise value?

Does green innovation increase enterprise value?

The Relationship between Environmental Regulation, Pollution and Corporate Environmental Responsibility

Investment appraisal and financial benefits of corporate green buildings: a developing economy case study

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