The Effect of GHG Emission, Environmental Performance, and Social Performance on Financial Performance of Listed Manufacturing Firms in Indonesia

The study aims to understand the effect of GHG emissions, environmental performance (EP), and social performance (SP) on financial performance (FP) of listed manufacturing firms in Indonesia. Sampling was based on the availability of the firms’ annual reports 2011 and interview feedback about the type and amount of fossil fuels and electricity consumed by the firms in 2011. Firm FP was measured in return on assets (ROA). GHG emissions were measured in CO2e intensity. Firm EP was measured in a dummy variable of PROPER rating. Firm SP was measured as social reporting scores developed through a content analysis. We found that CO2e intensity and social reporting scores have a positive and significant effect on ROA. The coefficient of PROPER rating was not significant.