The value relevance of the environmental performance and reporting

Year 2019, Volume: 2 Issue: 2, 237 - 244, 03.04.2020

Ayu Dwiny Octary

Abstract

Abstract

An information will be useful for decision making if
the information is relevant and reliable.  Investors not only consider the financial
performance but also consider the company's relation with their environment and
society because the sustainability of the company is not considered by their
financial performance alone. The company’s environmental performance information
will enable investors or other related parties to assess the efficiency and
sustainability of the company. The
purpose of this study is to determine (1) whether
environmental performance is value relevant and (2) whether sustainability
report is value relevant.
Environmental performance showed by rating PROPER Kementerian Lingkungan Hidup
award. To minimize the asymmetric information about
environmental performance in this study use environmental reporting in the
sustainability report. The
sample research obtained based on purposive sampling method in which the
sampling is based on certain criteria. 
Criteria of the sample is based on 
(1) company that registered on Indonesia stock exchange (BEI), (2)
company that publishes financial statements during 2014-2018, (3) manufacturing
company that publishes sustainability report in 2014-2017, (4) manufacturing
company that registered in PROPER Kementerian Lingkungan Hidup in 2015-2018.
The analysis method in this study is using multiple regressions. The result of
the research shows that environmental performance is value
relevant. The result
of the research shows that the sustainability report is value
relevant. The result
of the research indicates that simultaneously shows that environmental
performance and sustainability report is value relevant.

Keywords

environmental performance, PROPER, sustainability report

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