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FORMOSA NEWS - Makassar - Going Green Pays Off: Indonesian Manufacturing Firms Boost Profitability Through Environmental Accounting. Integrating environmental costs into corporate accounting is no longer just a regulatory burden or a moral obligation; it is a proven catalyst for higher financial performance. A recent breakthrough study conducted by Andi Rafiyadi Eka Saputra, Amiruddin, Darmawati at Universitas Hasanuddin examined 10 manufacturing companies listed on the Indonesia Stock Exchange to investigate how green accounting influences corporate profitability. Published in 2026, the comprehensive evaluation demonstrates that companies implementing robust environmental accounting practices experience a substantial rise in their return on assets
The Rising Demand for Industrial Sustainability
In recent years, environmental conservation and sustainable development have shifted from peripheral concerns to core drivers of corporate strategy. Regulatory bodies, international investors, conscious consumers, and society at large increasingly demand that industrial firms address the ecological consequences of their commercial operations. In Indonesia, this transition has been accelerated by national policies such as Law No. 32 of 2009 on Environmental Protection and Management, alongside stringent sustainable finance regulations. Despite these nationwide mandates, empirical evidence regarding the economic viability of green initiatives within regional economic hubs particularly in Eastern Indonesia and South Sulawesi has historically been scarce. To fill this critical knowledge gap, the research team at Universitas Hasanuddin analyzed how manufacturing units operating in these expanding regional economies balance their environmental expenditures with their ultimate financial obligations.
Measuring Green Investments and Transparency
To establish a clear link between ecological initiatives and corporate wealth, the researchers at Universitas Hasanuddin adopted a rigorous, multi-variable tracking methodology. The investigation evaluated 10 major manufacturing corporations over a five-year period from 2021 to 2025, culminating in 50 distinct data observations. The sample included prominent companies listed on the Indonesia Stock Exchange that manage active production or natural resource-based units in South Sulawesi, spanning sectors like cement, steel, paper, and animal feed.
Key Findings: Efficiency, Transparency, and Increased Profitability
The data analysis yielded definitive evidence that green accounting practices directly benefit corporate structures. The core results from the Universitas Hasanuddin research include:
The insights generated by the Universitas Hasanuddin research team provide practical, evidence-based guidance for corporate leaders, financial regulators, and academic researchers. For manufacturing Executives, the study validates that investing in robust green accounting software and rigorous sustainability reporting is a sound financial strategy that yields tangible economic returns. For policymakers and financial regulators, these empirical outcomes provide a strong justification to accelerate the enforcement of the Indonesian Sustainable Finance Taxonomy (TKBI). Ensuring mandatory sustainability disclosures for all listed companies will not jeopardize industrial growth; instead, it provides a credible market signal that attracts foreign capital, solidifies consumer loyalty, and secures operational renewals from local governments. According to the authors from Universitas Hasanuddin, systematic environmental reporting serves as an essential channel of communication with modern stakeholders, proving that operational efficiency and ecosystem stewardship can successfully co-exist in developing economic markets.
Authors Profil
Andi Rafiyadi Eka Saputra is a researcher at the Department of Accounting, Faculty of Economics and Business, Universitas Hasanuddin. His primary field of expertise focuses on environmental accounting, sustainability reporting indexes, and corporate financial management.
Amiruddin is a senior academic and lecturer at Universitas Hasanuddin. He specializes in corporate governance, financial accounting systems, and industrial corporate social responsibility initiatives.
Darmawati is an accounting expert based at Universitas Hasanuddin. Her academic research focuses heavily on stakeholder theory, operational asset performance, and sustainable manufacturing practices.
The Rising Demand for Industrial Sustainability
In recent years, environmental conservation and sustainable development have shifted from peripheral concerns to core drivers of corporate strategy. Regulatory bodies, international investors, conscious consumers, and society at large increasingly demand that industrial firms address the ecological consequences of their commercial operations. In Indonesia, this transition has been accelerated by national policies such as Law No. 32 of 2009 on Environmental Protection and Management, alongside stringent sustainable finance regulations. Despite these nationwide mandates, empirical evidence regarding the economic viability of green initiatives within regional economic hubs particularly in Eastern Indonesia and South Sulawesi has historically been scarce. To fill this critical knowledge gap, the research team at Universitas Hasanuddin analyzed how manufacturing units operating in these expanding regional economies balance their environmental expenditures with their ultimate financial obligations.
Measuring Green Investments and Transparency
To establish a clear link between ecological initiatives and corporate wealth, the researchers at Universitas Hasanuddin adopted a rigorous, multi-variable tracking methodology. The investigation evaluated 10 major manufacturing corporations over a five-year period from 2021 to 2025, culminating in 50 distinct data observations. The sample included prominent companies listed on the Indonesia Stock Exchange that manage active production or natural resource-based units in South Sulawesi, spanning sectors like cement, steel, paper, and animal feed.
The methodology focused on three fundamental business metrics:
- Green Accounting Index (GAI): Calculated as the exact percentage of operational budgets dedicated strictly to environmental protection, including pollution prevention, waste management, energy conservation, and environmental rehabilitation.
- Sustainability Reporting Disclosure Index (SRDI): Evaluated through a rigorous content analysis of corporate annual reports against 118 distinct criteria established by the Global Reporting Initiative (GRI Standards 2021).
- Return on Assets (ROA): Used as the primary metric for corporate profitability, reflecting how efficiently a company's executive management utilizes its aggregate assets to generate net income.
Key Findings: Efficiency, Transparency, and Increased Profitability
The data analysis yielded definitive evidence that green accounting practices directly benefit corporate structures. The core results from the Universitas Hasanuddin research include:
- Measurable Green Commitment: On average, the surveyed manufacturing enterprises allocated 3.84% of their total operational costs directly toward environmental preservation activities.
- Moderate Disclosure Levels: The investigated firms transparently reported an average of 43.3% of the international sustainability indicators outlined by the GRI framework.
- Direct Impact on Profitability: Companies that systematically internalize their environmental costs achieve superior asset efficiency and higher profit margins. Disciplined tracking of environmental expenses allows managers to eliminate operational waste, lower material usage, and optimize energy consumption.
- The Mediating Power of CSR: Green accounting acts as a strong data foundation that allows corporations to publish superior sustainability reports. This heightened Corporate Social Responsibility (CSR) disclosure significantly improves a firm's market reputation, lowers information asymmetry, and strengthens investor confidence. The statistical Sobel test confirmed a significant indirect effect ($\beta = 0.113$), proving that CSR disclosure partially bridges the relationship between environmental accounting and return on assets.
The insights generated by the Universitas Hasanuddin research team provide practical, evidence-based guidance for corporate leaders, financial regulators, and academic researchers. For manufacturing Executives, the study validates that investing in robust green accounting software and rigorous sustainability reporting is a sound financial strategy that yields tangible economic returns. For policymakers and financial regulators, these empirical outcomes provide a strong justification to accelerate the enforcement of the Indonesian Sustainable Finance Taxonomy (TKBI). Ensuring mandatory sustainability disclosures for all listed companies will not jeopardize industrial growth; instead, it provides a credible market signal that attracts foreign capital, solidifies consumer loyalty, and secures operational renewals from local governments. According to the authors from Universitas Hasanuddin, systematic environmental reporting serves as an essential channel of communication with modern stakeholders, proving that operational efficiency and ecosystem stewardship can successfully co-exist in developing economic markets.
Authors Profil
Andi Rafiyadi Eka Saputra is a researcher at the Department of Accounting, Faculty of Economics and Business, Universitas Hasanuddin. His primary field of expertise focuses on environmental accounting, sustainability reporting indexes, and corporate financial management.
Amiruddin is a senior academic and lecturer at Universitas Hasanuddin. He specializes in corporate governance, financial accounting systems, and industrial corporate social responsibility initiatives.
Darmawati is an accounting expert based at Universitas Hasanuddin. Her academic research focuses heavily on stakeholder theory, operational asset performance, and sustainable manufacturing practices.
Source
Andi Rafiyadi Eka Saputra, Amiruddin, Darmawati: Green Accounting and the Performance of Manufacturing Companies: The Mediating Role of Corporate Social Responsibility Disclosure. Jurnal Manajemen Bisnis, Akuntansi dan Keuangan (JAMBAK), Vol. 5, No. 5, Tahun 2026: Halaman 87-98.
DOI:https://doi.org/10.55927/jambak.v5i1.8
URL:
Andi Rafiyadi Eka Saputra, Amiruddin, Darmawati: Green Accounting and the Performance of Manufacturing Companies: The Mediating Role of Corporate Social Responsibility Disclosure. Jurnal Manajemen Bisnis, Akuntansi dan Keuangan (JAMBAK), Vol. 5, No. 5, Tahun 2026: Halaman 87-98.
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