The Effect of Green Concepts on Firm Performance Mediated by Sustainable Development

Abstract

The industry is currently showing a business paradigm shift towards sustainability in order to increase excellence and achieve long-term performance, one of which is through the implementation of green concepts. This study aims to examine the effect of green concepts, which consist of green accounting and green innovation on firm performance with sustainable development as mediating variables. The research focuses on manufacturing companies listed on the Indonesia Stock Exchange. Secondary data were analyzed using path analysis and bootstrapping techniques. The findings revealed a significant effect of green concepts on sustainable development. Sustainable development is proven to have a significant impact on improving firm performance, highlighting its pivotal role in linking green concepts to firm performance. However, green concepts have no direct significant effect on firm performance. The empirical examination of mediation effects demonstrates that the implementation of green concepts exhibits a significant indirect influence on firm performance through the mediation of sustainable development. The results of this study reinforce the role of sustainability-based strategies in bridging environmental and economic goals, particularly in the context of emerging economies. The findings underscore the importance of sustainability-oriented innovations and accounting practices for achieving long-term corporate success.