The Influence of Green Accounting on the Company Profitability

Abstract

This study aims to investigate the influence of green accounting on company profitability. This study is conducted due to the negative ecological impact of industrial business processes, such as environmental pollution, which can affect organisms in the surrounding area. This study focuses primarily on chemical industries listed on the Indonesia Stock Exchange in 2021 and evaluates them using PROPER. This study employs a purposive sampling method and uses secondary data of the 2021 annual reports of the industry as its source of information. The result of the study finds that green accounting and environmental performance positively impact on company profitability. Environmental performance has a positive effect on company profitability (ROA and ROE), meaning that the higher the PROPER rating, the greater the company's profitability. Companies are advised to be more concerned about the environment because their business processes must rely on natural resources that are detrimental to the environment and the people who experience it. Businesses must create a green background to have a more significant positive impact on the environment or industry.