Track: Sustainability and Green Systems

Abstract

The company's goal is to generate optimal profits to maintain the continuity of its business activities. Companies use various methods to make a profit, such as implementing a green business revolution which is also an effort to encourage achieving a sustainable economy. The company adopted a green business strategy due to increased environmental awareness among stakeholders who directed the company to innovate the green business in order to have a competitive advantage and produce good financial performance. The purpose of this study is to test factors that are suspected to affect the company's financial performance in the green business side in the manufacturing industry listed on the Indonesia Stock Exchange for the 2019-2020 period using sampling criteria, a sample of 96 observational data from 48 companies was obtained. The observation data were analyzed with descriptive statistics and regression of panel data. The results showed that only environmental performance affects financial performance because companies in the manufacturing industry can sustainably manage their operating activities so as to be able to obtain optimal profits. The novelty of this study is the empirical finding that environmental performance is able to encourage the financial performance of the manufacturing industry that went public on the Indonesia Stock Exchange. Recommendations for company management to innovate in improving green business strategies combined with their primary business strategies in obtaining financial returns. It is recommended that subsequent researchers re-examine this study's variables in different sectors.

Keywords

Environmental Performance, Financial Performance, Green Accounting, Green Intellectual Capital, and Green Product.