From Environmental Responsibility to Profitability: The Role of Green Accounting and Environmental Performance in Indonesia’s Manufacturing Firms

Abstract

In the modern business landscape, environmental sustainability has become a strategic necessity, especially for manufacturing companies in the food and beverage industry. Growing environmental awareness and corporate social responsibility pressures have led firms to adopt green accounting practices and improve environmental performance as part of corporate accountability. This study examines how green accounting and environmental performance influence the financial performance of food and beverage manufacturing firms listed on the Indonesia Stock Exchange (IDX) during 2022–2023. Using a quantitative research design, the study employed a purposive sampling technique and selected 30 companies that consistently published annual reports and PROPER environmental performance data. Secondary data were obtained from the IDX official website and PROPER reports issued by the Ministry of Environment and Forestry. Data analysis was conducted using multiple linear regression in SPSS 26, supported by t-tests and F-tests to evaluate partial and simultaneous effects. The results show that both green accounting (t = 2.340) and environmental performance (t = 4.812) significantly and positively affect financial performance, with all t-values exceeding the critical threshold. The F-test further confirms that these variables together have a significant combined effect (F = 14.638; p < 0.001). The regression model explains 61.9% of the variation in financial performance, indicating strong explanatory power. Moreover, environmental performance has a more substantial impact (β = 12.495) compared to green accounting (β = 2.221). In conclusion, the study demonstrates that integrating environmental considerations into accounting systems and operational activities strengthens corporate sustainability while simultaneously improving financial outcomes. The evidence supports the idea that environmentally responsible practices generate tangible economic benefits, especially in sectors highly exposed to ecological concerns such as food and beverage manufacturing.