The Effect of Green Accounting Implementation on The Financial Performance of Mining Sector Companies Listed on The Indonesia Stock Exchange, 2019-2023

Abstract

Purpose: This study examines whether the implementation of green accounting, proxied by disclosed environmental costs, influences the financial performance of mining companies listed on the Indonesia Stock Exchange over the 2019 to 2023
period.

Methodology: A quantitative approach was applied using secondary panel data drawn from annual reports and sustainability reports. Purposive sampling yielded eleven companies and fifty five firm year observations that met the selection criteria of consistent listing, complete reporting, and clear disclosure of environmental cost figures. Green
accounting was measured as the natural logarithm of disclosed environmental cost, and financial performance was measured through Return on Assets. Data were analyzed using simple linear regression following classical assumption testing.

Results: The regression coefficient for environmental cost was 0.5015 with a significance value of 0.446, indicating no statistically significant partial effect on Return on Assets. The coefficient of determination was 0.0110 and the adjusted value was negative at -0.0076, showing that the model explains only a marginal share of the variation in profitability.

Conclusions: Green accounting, as currently disclosed by sampled mining firms, has not yet translated into measurable profitability gains.

Limitations: The small purposive sample, the single proxy for environmental cost, and the short observation window constrain generalization.

Contributions: The findings offer an empirical benchmark for regulators, investors, and mining companies seeking to evaluate the near term financial materiality of environmental cost disclosure in a resource extraction context.