CORPORATE ENVIRONMENTAL PRACTICES AND FIRM VALUE: EVIDENCE FROM ENERGY AND BASIC MATERIALS COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE

Abstract

This study aims to examine the effect of environmental performance, environmental costs, and carbon emission disclosure on firm value in energy and basic materials companies listed on the Indonesia Stock Exchange for the 2021–2025 period. This study uses legitimacy theory as its theoretical basis. The data used are secondary data obtained from annual reports, sustainability reports, and PROPER reports. The research sample was determined using a purposive sampling method, resulting in 27 companies with a total of 135 observations. Firm value is measured using Tobin's Q, environmental performance is measured based on the PROPER rating, environmental costs are measured through the ratio of environmental costs to net profit after tax, and carbon emission disclosure is measured using the Carbon Disclosure Project (CDP) index. Data analysis was performed using multiple linear regression with the help of SPSS. This study is expected to provide empirical evidence regarding the effect of environmental performance, environmental costs, and carbon emission disclosure on firm value and become a consideration for companies and investors in supporting sustainable business practices.

Keywords: Environmental Performance, Environmental Costs, Carbon Emission Disclosure, Firm Value.