The impact of green innovation and environmental reporting on corporate performance

Abstract

This study investigates the effect of green innovation and environmental disclosure on firm performance related to consumers and shareholders. This study uses sales growth to see firm performance related to consumers and market value added (MVA) calculations related to shareholders. We obtained a sample of 54 food and beverage industry companies listed on the Indonesia Stock Exchange (IDX) based on the purposive sampling technique. The food and beverage industry was chosen to sample this study because it is one of Indonesia's most significant contributors to waste. This study uses path analysis panel data and the Sobel test to test the hypothesis. The test results show that green innovation significantly positively affected sales growth, while environmental reporting negatively affected. Firm size as a control variable positively affects MVA. In addition, sales growth does not indirectly affect the relationship between green innovation and environmental disclosure to MVA. This study shows that consumers are more interested in companies that engage in actual action through green innovation to reduce environmental damage. At the same time, the shareholders do not pay attention to the company's environmental activities.