Profit in the Era of Sustainability: The Influence of Green Accounting, ESG, and Capital Intensity on the Financial Performance of Energy Companies in Indonesia, 2019–2023
DOI:
https://doi.org/10.61132/iceat.v2i1.150Keywords:
Capital Intensity, Energy Industry, ESG Disclosure, Green Accounting, Return on AssetsAbstract
This study examines whether Green Accounting (proxied by Indonesia’s PROPER environmental rating), ESG disclosure, and capital intensity explain variation in profitability, measured by return on assets (ROA), among energy companies listed on the Indonesia Stock Exchange during 2019–2023. Using partial least squares structural equation modelling (PLS‑SEM) via WarpPLS 8.0 on 59 firm‑year observations, we find that (i) ESG disclosure is negatively and statistically significantly associated with ROA (p < 0.01), (ii) capital intensity is negatively and statistically significantly associated with ROA (p < 0.01), and (iii) Green Accounting (PROPER) has no significant direct effect on ROA. The model’s explanatory power is modest (R² = 0.130) and overall model fit is acceptable (APC = 0.250, p = 0.010; GoF = 0.361). These results suggest that, in this period, heavier sustainability disclosure and more asset‑intensive structures coincided with lower short‑term returns on assets, while compliance‑oriented environmental performance did not translate into immediate profitability. We discuss managerial and policy implications regarding disclosure quality, capital productivity, and the time profile of sustainability payoffs.
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