The Effect of Corporate Social Responsibility (CSR) Disclosure, Environmental Performance, And Environmental Cost on Financial Performance (Empirical Study on Industrials Companies Listed on the Indonesia Stock Exchange for the Period 2020–2025)

Abstract

This study aims to examine the effect of Corporate Social Responsibility (CSR) disclosure, Environmental Performance, and Environmental Cost on Financial Performance in Industrials Companies Listed on the Indonesia Stock Exchange for the Period 2020–2025. The research sample was determined using a purposive sampling method, resulting in 10 companies observed over 6 years, producing an initial 60 firm-year observations, of which 3 were identified as outliers, leaving a final sample of 57 observations. The dependent variable, Financial Performance, is proxied by Return on Assets (ROA), while Environmental Performance is measured using the PROPER rating, Environmental Cost is measured as the ratio of total environmental costs to net income after tax, and CSR disclosure is measured using the Corporate Social Responsibility Disclosure Index (CSRDI) based on GRI indicators. Hypothesis testing was conducted using multiple linear regression analysis with the assistance of SPSS 29 software. The results indicate that CSR disclosure has a positive and significant effect on Financial Performance (β = 0.325; sig. = 0.021), Environmental Performance has a positive and significant effect on Financial Performance (β = 0.291; sig. = 0.018), while Environmental Cost has no significant effect on Financial Performance (β = 0.243; sig. = 0.184). Simultaneously, the three independent variables significantly affect Financial Performance (F = 6.328; sig. < 0.001), with the model explaining 38.6% of the variation in ROA (Adjusted R² = 0.386)