Analysis of Relationship of Environmental Performance and Firm Value

Abstract

Environmental has been an isuue for Indonesia, which impose threats to sustainable development, such as the impact of climate change and also energy and food crisis. Bank Indonesia as a regulator in banking industry, decided to publish the regulation about Green Banking, as an act to focus on raising awareeness and capacity building for bank, as a financial intermediary which play an important role to change the economic development. This study analyze the relationship between Environmental performance and firm value, which is measured with Tobin's Q ratio. The sample data is obtained from 41 banks that listed in Indonesia Stock Exchanges (BEI) in the period of 2011 - 2013. The methodolgy conducted in this study is multiple linear regression. The outcome of this study indicates there is a postive relationship between environmental performance and firm value. This result is in line with previous similar studies which were based on data from other sectors in Indonesia.