Corporate Social Responsibility (CSR) and environmental performance have proven to be essential drivers for energy sector companies in Indonesia to enhance their financial performance or profitability. This finding is revealed in a study by Putri Panangguhan, Maiyaliza, and Agustina from Swadaya Gunung Jati University, published in the June 2026 issue of the Indonesian Journal of Business Analytics. The study analyzed data from energy companies listed on the Indonesia Stock Exchange (IDX) between 2021 and 2024 to understand how green investment and CSR affect financial performance, with environmental performance serving as a moderating variable.
The energy sector faces global pressure to reduce emissions, prompting companies to implement green investment and CSR as part of their sustainability strategies. However, the effectiveness of these investments on short-term profitability has often yielded inconsistent results. This study aims to bridge that gap by examining whether environmental performance—measured via the PROPER rating from the Ministry of Environment and Forestry—can strengthen the relationship between sustainability strategies and financial outcomes.
The researchers employed a quantitative approach using panel data regression analysis, involving 40 observations from energy sector companies. Financial performance was measured using Return on Assets (ROA), while the CSR variable was measured using a disclosure index based on Global Reporting Initiative (GRI) standards.
The analysis yielded the following key findings:
Positive Impact of CSR: CSR disclosure has a positive and significant effect on ROA, indicating that transparent social responsibility practices can improve investor confidence and profitability.
Green Investment is Long-term: Green investment has not shown a significant impact on ROA in the short term, likely due to high upfront costs.
Role of Environmental Performance: High environmental performance is proven to strengthen the positive impact of CSR on financial performance. However, this variable does not moderate the relationship between green investment and ROA.
This research provides vital insights for business practitioners and policymakers that the success of sustainability strategies cannot rely solely on capital investment. Energy sector companies are advised to prioritize high-quality CSR implementation and maintain strong environmental performance, as the combination of both is proven to be more effective in driving profit growth than simply engaging in green investment without supporting management of environmental impacts.
Author Profile: This research was authored by Putri Panangguhan, Maiyaliza, and Agustina from the Faculty of Economics and Business, Swadaya Gunung Jati University, with expertise in financial management, accounting, and corporate sustainability.
Research Source:
- Article Title: The Effect of Green Investment and Corporate Social Responsibility (Csr) on Financial Performance With Environmental Performance as a Moderating Variable in Energy Sector Companies on the Idx
- Journal Name: Indonesian Journal of Business Analytics (IJBA)
- Publication Year: 2026
- DOI:
https://doi.org/10.55927/ijba.v6i3.16525
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