Reporting on Environmental Innovation As a Means of Enhancing Firm Performance
Abstract
In recent decades, there has been a notable increase in the attention paid to environmental issues, concurrent with a growing awareness of the importance of sustainability on a global scale. Environmental innovation performance constitutes an essential element of contemporary business strategy. It is hypothesized that enhancements to environmental innovation performance may yield favorable outcomes for corporate performance. A business's profitability, operational efficiency, and reputation typically indicate its overall performance. This study aims to examine the impact of environmental innovation on organizational performance. The sample for this study was drawn from all companies listed on the Indonesia Stock Exchange (IDX) that had submitted environmental innovation reports. The method employed was purposive sampling, which was used to select the sample, and linear regression was used to analyze the results of this study. The findings indicate that environmental innovation has a significant positive effect on firm performance. The conclusions of this study can provide insight to academics and practitioners on the issue of innovation in the environment, namely that it can improve firm performance, and can provide insight for stakeholders in green investment decisions.
Downloads
References
Albort-Morant, G., Leal-Millán, A., Cepeda-Carrion, G., & Henseler, J. (2018). Developing green innovation performance by fostering of organizational knowledge and coopetitive relations. Review of Managerial Science, 12(2), 499–517. https://doi.org/10.1007/s11846-017-0270-z
Barney, J. B. (1986). Strategic Factor Markets: Expectations, Luck, and Business Strategy. Management Science, 32(10), 1231–1241. https://doi.org/10.1287/mnsc.32.10.1231
Brigham, E. F., & Ehrhardt, M. C. (2015). Financial Management: Theory & Practice (E. F. Brigham & M. C. Ehrhardt, Eds.; 15e ed.). CengageLearning.
Chen, S., & Golley, J. (2014). “Green” productivity growth in China’s industrial economy. Energy Economics, 44, 89–98. https://doi.org/10.1016/j.eneco.2014.04.002
Chen, Y. S., Lai, S. B., & Wen, C. T. (2006). The influence of green innovation performance on corporate advantage in Taiwan. Journal of Business Ethics, 67(4), 331–339. https://doi.org/10.1007/s10551-006-9025-5
Cheng, C. C. J., Yang, C., & Sheu, C. (2014). The link between eco-innovation and business performance: a Taiwanese industry context. Journal of Cleaner Production, 64, 81–90. https://doi.org/10.1016/j.jclepro.2013.09.050
Dangelico, R. M., & Pujari, D. (2010). Mainstreaming green product innovation: Why and how companies integrate environmental sustainability. Journal of Business Ethics, 95(3), 471–486. https://doi.org/10.1007/s10551-010-0434-0
Eccles, R. G., Ioannou, I., Serafeim, G., & Hall, M. (2012). The Impact of Corporate Sustainability on Organizational Processes and Performance. National Bureau of Economic Research, 1–37. http://www.nber.org/papers/w17950
Elkington, J., & Rowlands, I. H. (1999). Cannibals with forks: the triple bottom line of 21st century business. Alternatives Journal, 25(4), 42–43.
Giese, G., Lee, L.-E., Melas, D., Nagy, Z., & Nishikawa, L. (2019). Foundations of ESG Investing: How ESG Affects Equity Valuation, Risk, and Performance. The Journal of Portofolio Management, 45(5), 1–17.
Goel, P. (2010). Triple Bottom Line Reporting: An Analytical Approach for Corporate Sustainability. Journal of Finance, Accounting & Management, 1(1), 27.
Guinot, J., Barghouti, Z., & Chiva, R. (2022). Understanding Green Innovation: A Conceptual Framework. Sustainability, 14(10). https://doi.org/10.3390/su14105787
Hart, S. L., & Ahuja, G. (1996). Does it Pay to Be Green? An Empirical Examination of The Relationship Between Emission Reduction and Firm Performance. Business Strategy and the Environment, 5(1), 30–37.
Higgins, R. C. (2016). Analysis for financial management (R. C. Higgins, Ed.; 11th ed.). McGraw-Hill.
Huber, J. (2008). Pioneer countries and the global diffusion of environmental innovations: Theses from the viewpoint of ecological modernisation theory. Global Environmental Change, 18(3), 360–367. https://doi.org/10.1016/j.gloenvcha.2008.03.004
Ioannou, I., & Serafeim, G. (2017). The Consequences of Mandatory Corporate Sustainability Reporting. Harvard Business School Research Working Paper, 49.
Madhani, P. M. (2010). Resource Based View (RBV) of Competitive Advantage An Overview. Resource Based View: Concepts and Practices, 3–22. http://ssrn.com/abstract=1578704Electroniccopyavailableat:http://ssrn.com/abstract=1578704https://ssrn.com/abstract=1578704Electroniccopyavailableat:http://ssrn.com/abstract=1578704Electroniccopyavailableat:http://ssrn.com/abstract=1578704
Mankiw, N. G. (2021). Principles of economics (N. G. Mankiw, Ed.; 9th ed.). Cengage Learning.
Mol, A. P. J., & Spaargaren, G. (2000). Ecological modernisation theory in debate: A review. Environmental Politics, 9(1), 17–49. https://doi.org/10.1080/09644010008414511
Murphy, J. (2000). Ecological modernisation. Geoforum, 31(1), 1–8. https://doi.org/10.1016/S0016-7185(99)00039-1
Porter, M. E., & Van Der Linde, C. (1995). Toward a New Conception of the Environment-Competitiveness Relationship. In Journal of Economic Perspectives (Vol. 9, Issue 4).
Rennings, K. (2000). Redefining innovation — eco-innovation research and the contribution from ecological economics. Ecological Economics, 32(2), 319–332. https://doi.org/10.1016/S0921-8009(99)00112-3
Spaargaren, G., & Mol, A. P. J. (1992). Sociology, environment, and modernity: Ecological modernization as a theory of social change. Society & Natural Resources, 5(4), 323–344. https://doi.org/10.1080/08941929209380797
Yan, R., Li, X., & Zhu, X. (2022). The Impact of Corporate Social Responsibility on Sustainable Innovation: A Case in China’s Heavy Pollution Industry. Frontiers in Psychology, 13. https://doi.org/10.3389/fpsyg.2022.946570
Zaharia, R. M., & Zaharia, R. (2021). Triple Bottom Line. In The Palgrave Handbook of Corporate Social Responsibility (pp. 1–28). Springer International Publishing. https://doi.org/10.1007/978-3-030-22438-7_2-1
Copyright (c) 2025 Accounting Research Unit (ARU Journal)
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
This work is licensed under a 