Green Accounting, Green Intellectual Capital, And Financial Performance: Reassessing The Moderating Role Of Good Corporate Governance In Indonesian Financial Firms

Abstract

Green accounting is an accounting approach that incorporates environmental aspects into a company's accounting system, specifically related to costs, assets, and liabilities related to the impact of company activities on the environment. Green intellectual capital, consisting of environmentally friendly human, structural, and relational capital, will help companies adapt to environmental regulations and increase stakeholder value. The research gap in this study found that some studies had an influence and others did not. Some moderating variables did not moderate the relationship between the two variables. The gap phenomenon, which occurred, was that global economic fluctuations resulted in an average ROA of only 1.8% in the 2023-2024 period, citing hidden cost pressures and structural risks. This is despite the significant costs incurred by companies (some of which are disclosed by companies through sustainability reports) and the government related to sustainability. Several studies have demonstrated positive and negative relationships between dependent and independent variables. Similarly, the moderating variable, GCG, can moderate and not moderate the relationship between variables. Therefore, the researchers conducted this study again. This study aims to determine the effect of green accounting and green intellectual capital on financial performance and the moderating variable, good corporate governance. The data studied comprises annual and sustainability reports from financial sector companies listed on the Indonesia Stock Exchange (IDX) for 2022-2024. The sample selection technique used purposive sampling. The research data is panel data processed using Eviews 13 for panel data regression analysis. Panel Data Model Estimation, Chow Test, Hausman Test, Descriptive Statistics, Classical Assumption Test, Multiple Regression Analysis, and Moderated Regression Analysis, including the F-Test and t-Test, were used. The R2 test was used to select the Random Effects Model. The results showed that green accounting has an effect on financial performance, while green intellectual capital has no effect. Good corporate governance cannot moderate either green accounting or green intellectual capital on financial performance. These findings indicate that tangible and measurable environmental management practices are more effective in improving financial performance than environmentally based intellectual assets, the economic benefits of which are not readily apparent in the short term. These findings provide a new perspective: the existence of corporate governance mechanisms does not always enhance the effectiveness of sustainability practices in improving financial performance. This study provides evidence that the influence of sustainability practices on financial performance depends on company characteristics and the research context. The results indicate that the implementation of green accounting has a more tangible financial impact than green intellectual capital, while the implementation of good corporate governance has not been able to strengthen this relationship.