INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
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The Potential of Carbon Emission Disclosure as a Foundation for
Business Sustainability in Mining Companies in Indonesia
Muh. Zulfadli Gaffar1 , Muhammad Wahyuddin Abdullah2 , Raodahtul Jannah3
123 Majors Accountancy, University Islam Country Alauddin, Indonesia
DOI: https://doi.org/10.51244/IJRSI.2025.1210000041
Received: 30 Sep 2025; Accepted: 07 Oct 2025; Published: 01 November 2025
ABSTRACT
This study aims to analyze the influence of environmental performance and financial performance on business
sustainability with carbon emission disclosure as a moderating variable. This study was conducted on coal
mining manufacturing companies listed on the Indonesia Stock Exchange (IDX). This research is a
quantitative study so that the type of data used is documentary data. While the data sources used in this study
are secondary data . The number of samples in this study is 20 samples. The research method used is
moderated regression analysis obtained from annual reports and company sustainability reports.
Research results show that environmental performance has a positive and significant impact on business
sustainability. Financial performance has a positive and significant impact on business sustainability. Carbon
emissions disclosure strengthens the influence of environmental performance on business sustainability.
Carbon emissions disclosure does not strengthen the influence of financial performance on business
sustainability.
Keywords: Environmental Performance, Financial Performance, Business Sustainability
INTRODUCTION
The development of the capital market in Indonesia is currently experiencing rapid progress. This progress has
fueled investor interest in investing in the capital market. The existence of this capital market provides
investors with a tool to measure a company's performance and financial condition through financial reports,
which contain information on the entity's financial position, financial performance, and cash flow, which is
useful for investment decision-makers [1] .
A company's achievements are influenced by every activity the company does in utilizing its resources.
Therefore, company performance is one of the important things that every company must achieve. The higher
the economic level of a country, the tighter the competition between companies will be followed, which will
certainly affect the company's existence [2] . Therefore, the public wants companies to be responsible for the
environment by minimizing the negative impacts of company operations. When companies generate an impact
on the sustainability of nature and the environment that is increasingly large due to the influence of company
activities, this is where the function of the accounting field is used to assist in environmental conservation [3] .
Business continuity is the assumption that an entity will remain in business for the foreseeable future. The
entity will not be forced to cease operations and liquidate assets in the near future. Business sustainability will
only be assured if social and environmental dimensions are taken into account. The essence of corporate social
responsibility is to strengthen the sustainability of the company itself by building collaborative pathways
between stakeholders [4] .
Business sustainability assumes that a company will continue to exist, meaning that it is expected that there
will be no liquidity in the future. The assumption of business sustainability means that a business entity is
considered to be able to maintain its business activities in the long term and will not be liquidated in the short
term. One of the factors that influence business sustainability is environmental performance and financial
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
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performance [5] .
Research by Fathia & Virna (2023) found that environmental performance has a positive and significant
impact on business sustainability. Environmental performance is part of a company's efforts to enhance its
positive image by paying attention to the environment. Environmental performance is a crucial aspect of a
company because it reflects how the company manages the environment. A company with good environmental
performance can gain positive feedback from the public, especially investors.
Environmental performance is the achievement of an organization by using the company's capabilities and
reducing the negative effects of the company's business operations on the environment [7] . Environmental
performance will be reported in environmental disclosures to meet stakeholder demands so as to maintain
stakeholder trust in the company [8] . Environmental disclosure is information about environmental issues that
affect the company's future activities, risks, and the company's environmental policies [9] .
With increasing awareness of the importance of sustainability, companies are required to focus not only on
profit , but also on sustainable operations that minimize negative impacts on the environment and society [10],
[11], [12] . Evaluating financial performance within this sustainability framework requires a more inclusive
and comprehensive approach.
Saputri's (2019) research revealed that financial performance positively impacts business sustainability.
Evaluating financial performance using metrics such as asset management, debt management, and market
value performance provides insight into a company's sustainability position across various sectors. However,
this contrasts with research by Prena & Diarsa (2019) , which found that financial performance had no impact
on business sustainability.
One way to assess the efficiency of a business's financial performance in financial management is to use
profitability ratio analysis. Profitability analysis is necessary to assess the size of a business's financial
performance.
A company's business productivity. Profitability ratios indicate a company's ability to generate profits over a
certain period. This ratio provides an overview of the company's management effectiveness. Investors can use
a company's profitability ratio as a tool to measure the capital invested in the company [13] .
One ratio commonly used to measure a company's financial performance is Return on Assets (ROA) [14] .
Return on Assets is a ratio based on a company's total assets, which describes the company's ability to generate
profits. According to Putri et al. (2022), Return on Assets is a ratio used to measure a company's ability to
generate profits because it represents the return on the company's activities. A higher return on assets means a
higher amount of net profit generated for each rupiah of funds invested in total assets. Conversely, a lower
return on assets means a lower amount of net profit generated for each rupiah of funds invested in total assets.
The indicator that can maintain the company's sustainability is Carbon Emission Disclosure . Fathia & Virna
(2023) stated that carbon emission disclosure can also be one of a company's efforts to maintain sustainability.
Disclosure of carbon emissions by a company not only informs about the amount of carbon emissions
produced but also the company's plans to reduce carbon emissions. A good company can be identified by the
minimal carbon produced by its activities and the decreasing decline each year. Reducing carbon emissions is
one of a company's efforts to protect the environment. This can encourage corporate sustainability, thus
concluding that carbon emission disclosure has an impact on corporate sustainability.
The entry of investors, both individuals and business entities, into Indonesian companies has generated many
benefits for Indonesia, especially mining sector companies in Indonesia [16] . With the addition of new capital,
national economic growth and mining sector development can develop even better. In addition, there are costs
that arise from conflicts of interest between companies and the government adopted by large companies,
namely political costs . Large companies adopt more political costs than other small companies and tend to
carry out profit management to reduce these costs. The company's management system is still considered weak
towards environmental aspects, which can be seen from environmental performance measurements.
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
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Based on the above description, further development of business sustainability is necessary to more effectively
meet the financial information needs of various types of companies, including those in the service, trade, and
manufacturing sectors. This development is expected to increase the relevance and accuracy of business
sustainability in providing the information required by users, while also supporting the fulfillment of business
needs, particularly in specific industrial sectors such as coal production.
Although various previous studies have examined the relationship between environmental performance,
financial performance, and business sustainability, there are still research gaps that need to be addressed. First,
previous research results show inconsistent findings regarding the influence of financial performance on
business sustainability across various industry contexts. Second, most previous research focuses on developed
countries, while studies in emerging markets like Indonesia are still limited. Third, the integration of
environmental performance and carbon emission disclosure as a moderating variable has rarely been explored
empirically. Fourth, the carbon disclosure approach used in previous studies tends to be descriptive and has not
considered its strategic role in strengthening business sustainability. Therefore, this study seeks to fill this gap
by empirically testing the role of carbon emission disclosure as a moderating variable in the relationship
between environmental performance, financial performance, and business sustainability in mining companies
in Indonesia.
REVIEW LIBRARY
Theory Stakeholders : According to Freeman (1984), stakeholder theory explains that companies have
relationships with stakeholders who directly influence each other (between the company and stakeholders)
through the company's actions. Stakeholder theory emphasizes that company operations not only work to meet
financial goals, but must also provide benefits to stakeholders to maintain the operations carried out by the
organization. This theory aims to have a strong bond between the company and its stakeholders, so that
sustainable success is achieved [18]
Legitimacy Theory: Davis & Blomstrom (1968) are social scientists who have contributed to the development
of legitimacy theory. They developed ideas about organizational legitimacy and how organizations must adapt
to changes in the social environment to maintain support and continuity of their businesses. According to
Ghozali & Charir (2007), legitimacy theory suggests that a business entity can ensure its operations comply
with the norms and regulations applicable in its environment. The disclosure approach by companies aims to
encourage companies to be proactive in addressing environmental issues and ensure that stakeholder principles
are considered by all parties involved in the company. Legitimacy theory identifies that the purpose of social
responsibility disclosed by companies is to gain legitimacy from the operational environment, maximize long-
term financial strength, and be able to create harmony with public perception (Amaliyah & Puspawati, 2022).
Environmental Performance: Corporate environmental performance according to Bahri & Cahyani (2016) is
the company's performance in finding good (green) areas. Environmental performance is the measurable and
quantifiable results of an environmental management system, which is related to the inspection of its
environmental aspects, where the environmental performance assessment is based on environmental policies,
environmental targets, and environmental targets.
Financial performance: Company performance is a formal effort undertaken by a company to evaluate the
efficiency and effectiveness of its activities over a specific period of time. Financial performance is an analysis
conducted to determine the extent to which a company has properly and correctly implemented financial
regulations (Fahmi, 2011).
Carbon Emission Disclosure: Carbon emissions are the release of gases containing carbon compounds into the
atmosphere due to the combustion of carbon-containing compounds [6] . Disclosure of carbon emissions by
companies not only informs about the amount of carbon emissions produced, but also the company's plans to
reduce the carbon emissions produced. By disclosing carbon emissions, the public and investors will know
how much emissions are produced and how the company is trying to reduce the carbon emissions produced.
Business Sustainability: The concept of sustainability first emerged in Stockholm during an environmental
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue X October 2025
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conference in 1972. The theory of sustainability was first proposed by Meadows et al., (1972), who stated that
companies prioritize economic, social, and environmental issues. Sustainability within the company itself is a
plan to maintain the company's sustainability by balancing the interests of stakeholders (Pemer et al , 2020).
METHOD STUDY
Research Type and Location: This is a quantitative study, therefore, the data used is documentary. The data
sources for this study were obtained from coal mining manufacturing companies listed on the Indonesia Stock
Exchange.
Research Approach: This research is a type of causal comparative research .
Population and Sample: The population used in this study were companies listed on the Indonesia Stock
Exchange for the 2019-2024 period. The sample consisted of 20 companies.
Method of collecting data In accordance with the type of data used, namely secondary data, the data collection
method used in this study is documentation. The documentation method involves tracing selected annual
reports and samples. Documentation can be done by studying relevant data, either from the library or through
websites, to obtain information related to the research variables. Annual reports can be obtained from
manufacturing companies listed on the Indonesia Stock Exchange from 2019 to 2024.
Data Analysis Techniques : The data analysis used in this study uses the assistance of the Statistical Package
for the Social Sciences (SPSS) version 29 program with a panel data regression analysis model and moderated
regression analysis or what is called absolute assumptions.
Descriptive statistics describe or provide an overview of the object being studied through sample or population
data (Sugiyono, 2017). To describe variables so that they are easier to understand, descriptive statistics are
used, which produce average ( mean ), minimum, maximum, and standard deviation values.
Hypothesis Testing
Logistic Regression Analysis: The reason for using logistic regression analysis is because the dependent
variable of this researcher is business continuity which is dummy . Logistic regression is a special form where
the dependent variable is divided into two parts or groups (binary). Although the formula can be more than two
groups. Logistic regression is a regression used to find a regression equation if the dependent variable is a
variable in the form of a binary logistic regression scale used to find a regression equation where the dependent
variable is a two-choice categorical type (Pratiwi, 2013). The analysis model used in this study is logistic
regression analysis which is shown by the following equation:
Y = a + �� 1X1 + �� 2X2 + e
Information :
Y : Business Sustainability
a : Constant
�� 1 : Regression coefficient X1
�� 2 : Regression coefficient X2
�� 1 : Environmental Performance
�� 2 : Financial Performance
�� : Standard Error
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The stages in testing using logistic regression can be explained as follows.
Assessing the feasibility of the regression model: The feasibility of the regression model is assessed using the
Hosmer and Lemeshow's Goodness of Fit Test . Hosmer and Lemeshow's Goodness of Fit Test tests the null
hypothesis that the empirical data fits or is in accordance with the model (there is no difference between the
model and the data so that the model can be said to be fit). If the statistical value of Hosmer and Lemeshow's
Goodness of Fit Test is equal to or less than 0.05, then the null hypothesis is rejected which means there is a
significant difference between the model and its observed values so that the Goodness of Fit of the model is
not good because the model cannot predict its observed values. If the statistical value of Hosmer and
Lemeshow's Goodness of Fit Test is greater than 0.05, then the null hypothesis cannot be rejected and means
the model is able to predict its observed values or it can be said that the model is acceptable because it fits its
observed data.
Assessing the overall model fit : The overall model fit is assessed by comparing the value between 2 Log
Likelihood (-2LL) at the beginning (Block Number = 0), where the model only includes a constant with a
value of -2 Log Likelihood (-2LL) at the end (Block Number = 1), where the model includes a constant and
independent variables. If the value of -2LL Block Number = 0 > the value of -2LL Block Number = 1, this
indicates a good regression model or in other words the hypothesized model fits the data.
Coefficient of determination ( Nagelkerke R square ): The value of the coefficient of determination in the
logistic regression model is indicated by the value of Nagelkerke R square . The value of Nagelkerke R square
shows the variability of the dependent variable that can be explained by the variability of the independent
variable, while the remainder is explained by other variables outside the research model.
Classification table: A classification table shows the predictive power of a regression model in predicting the
likelihood of a dependent variable occurring. The predictive power of 45 regression models in predicting the
likelihood of a dependent variable occurring is expressed as a percentage. This table shows or contains data
groupings, which can be classified into single and multiple classification tables.
Logistic regression model formed and hypothesis testing: Parameter estimates from the model can be seen in
the output Variables in the Equation. Outputs The variables in the equation show the regression coefficient
values and their significance levels. The regression coefficients of each tested variable indicate the form of the
relationship between the variables. Hypothesis testing in this study is a one-sided test conducted by comparing
the significance level (sig) with the error level (α) = 5%.
Test Using the Absolute Difference Test Method: The potential of moderating variables in increasing or
decreasing the impact of the independent variable on the dependent variable is tested using moderated
regression analysis. The absolute value difference test is conducted by finding the standardized absolute value
difference between the two independent variables. If the absolute value difference between the two
independent variables is significantly positive, then the variable moderates the relationship between the
independent variable and the dependent variable. The following is a regression formula model for testing the
moderating effect in this study:
Y= a + �� 1X1 + �� 2X2 + �� 3X3 + �� 4X1X3 + �� 5X2X3 + e
Information:
Y : Corporate Sustainability
a : Constant
�� 1 : Regression coefficient X1
�� 2 : Regression coefficient X2
�� 1 : Environmental Performance
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
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�� 2 : Financial Performance
�� 3 : Carbon Emission Disclosure
X1X3 : Carbon Emission (interaction of X1 and X3)
X2X3 : Carbon Emission (interaction of X2 and X3)
�� : Standard Error
This study has several methodological limitations. First, the study's scope only focused on coal mining
companies listed on the Indonesia Stock Exchange, so the results cannot be generalized to other sectors.
Second, the relatively small sample size of 20 companies may limit the model's generalizability. Third, this
study relies on secondary data in the form of annual reports and sustainability reports, which may have varying
levels of disclosure between companies. Fourth, the carbon emission disclosure variable is measured based on
an analysis of public documents, so it does not fully reflect actual company practices in the field.
Operational Definition
Independent Variable (X): An independent variable is a variable that is the cause or factor that can influence
another variable (the dependent variable). This variable is independent of other variables and is considered a
factor that contributes to change. The independent variables in this study are as follows:
Environmental Performance (X1 ) : Environmental performance is a company's ability to manage its
environmental impacts from its operational activities. According to Suratno et al ., (2007) a company's
environmental performance is the company's performance in creating a good ( green ) environment.
Environmental performance assessment is measured by the PROPER rating assessment conducted by the
Ministry of Environment, where the purpose of the assessment is to improve the company's performance in
environmental conservation. PROPER, which is an environmental rating program from the Ministry of
Environment, for example, is a ranking based on the environmental performance of each company, so that it
can be compared and become a correction for the company [24] . A company's environmental performance is
considered good and supportive if it is reflected in the color category given in PROPER to its activities or
activities (Angelina et al., 2023). The following are the criteria for giving scores on the PROPER scale used,
including:
Table 1 PROPER Level Scoring
Color Category Score
Gold Very good 5
Green Good 4
Blue Enough 3
Red Bad 2
Black Very bad 1
Source: Processed data (2024)
Financial Performance (X2 ) ; Financial performance is the ability of a company or organization to manage
financial resources to achieve goals and objectives. According to Fahmi (2011), the definition of financial
performance is an analysis conducted to determine the extent to which a company has implemented financial
regulations properly and correctly. In this study, financial performance can be measured based on the
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
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company's profitability ratio , namely by using Return on Assets (ROA). The profitability ratio is used to
assess a company's ability to generate profits or gains within a certain period. The ROA formula used refers to
the research of Wijaya et al., (2021):
ROA:
Laba Bersih
Total Aset
Dependent Variable (Y): In research on going concern audit opinions, dummy variables are used to
categorize a condition into a binary value (0 or 1), so that it can be analyzed using logistic regression. The
commonly used dependent variable is the going concern audit opinion , where a value of 1 indicates the
company did not receive a going concern audit opinion , while a value of 0 indicates the company received the
opinion. Some independent variables are also often converted into dummy variables , such as the history of
previous audit opinions 1 = did not receive a going concern opinion , 0 = received a going concern opinion if
the auditor adds a special paragraph if there is substantial doubt about the entity's ability to continue as a going
concern. Sentence the key usually like :
"There is a material uncertainty that may cast significant doubt on the entity's ability to continue as a going
concern."
Moderating Variable (M) A moderating variable is a variable that influences the relationship between the
independent variable and the dependent variable. A variable can strengthen, weaken, or change the direction of
the relationship between the two variables. The moderating variable used in this study is carbon emission
disclosure. Carbon emission disclosure was measured using a checklist based on research by Choi et al .
(2013) . The checklist was based on an information request form provided by the Carbon Disclosure Project
(CDP). CDP is an independent non-profit organization that holds a disseminated volume of climate change
information worldwide, comprising more than 3,000 organizations in 60 countries. The checklist was used to
obtain information on the extent of climate change and carbon emission disclosures available in the company's
annual report. According to Choi et al ., (2013) determined five major categories relevant to climate change
and carbon emissions as follows: climate change risks and opportunities (CC/ Climate Change ), greenhouse
gas emissions (GHG/ Green House Gas), energy consumption (EC/ Energy Consumption ), greenhouse gas
reduction and costs (RC/ Reduction and Cost ) and carbon emission accountability (AEC/ Accountability of
Emission Carbon ). Within these five main categories, there are 18 items used to identify the extent of
information disclosure related to climate change and carbon emissions.
RESULTS AND DISCUSSION
Logistic Regression Test
Logistic regression is an approach to creating predictive models, similar to linear regression, commonly known
as Ordinary Least Squares (OLS) regression. The difference is that in logistic regression, researchers predict
the dependent variable (Y) on a dichotomous scale. The dichotomous scale refers to a nominal data scale with
two categories. This study uses logistic regression because the dependent variable is business sustainability.
using dummy variables that use the numbers 0 (zero) and 1 (one).
Analysis of Regression Model Feasibility Test
The feasibility of the regression model was assessed using Hosmer and Lomeshow's Goodness of Fit Test. The
hypothesis for assessing the feasibility of the regression model:
H0: There is no difference between the model and the data
Ha: there is a difference between the model and the data
If the value of the Hosmer and Lomeshow's Goodness of Fit Test statistic is equal to or less than 0.05, then the
null hypothesis is rejected, meaning there is a significant difference between the model and its observed values
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, so the Goodness of fit model is not good because the model cannot predict its observed values.
Conversely, if it is not significant, the Null hypothesis cannot be rejected, meaning the empirical data is the
same as the model or the model is said to fit. The results of the study using the SPSS version 20 program
obtained the following output:
Table 2 Hosmer and Lemeshow Test
Hosmer and Lemeshow Test
Step Chi-square Df Sig.
1 3,394 8 ,907
Source: SPSS Output Results, 2025
Table 2 shows that the Hosmer and Lemeshow's Goodness of Fit Test value is 3.394 and a significance level of
0.907 . This significance level is greater than 0.05, indicating that the model is able to predict the observed
values, or it can be said that the model is acceptable because it fits the observed data.
Overall Model Test Analysis
The overall assessment of the model is done by comparing the value between -2 Log Likelihood (-2LL) at the
beginning ( Block Number = 0), where the model only includes a constant with the value of -2 Log Likelihood
(-2LL) at the end ( Block Number = 1), where the model includes a constant and independent variables.
Table 3 Overall fit model test
-2 Log Likelihood
-2 Initial Log Likelihood (Block
Number = 0)
84.54
-2 Final Log Likelihood (Block
Number = 1)
52 .
795
Source: SPSS Output Results, 2025
The table above shows that the -2 Log Likelihood (-2LL) value is used in logistic regression analysis to assess
the extent to which the model fits the data. The smaller the -2LL value , the better the model is in explaining
the relationship between the independent and dependent variables. In the results obtained, the initial -2 Log
Likelihood (Block 0) was 84.5454 , the final -2 Log Likelihood (Block 1) decreased to 52.795 , indicating an
increase in the model's fit to the data. This decrease in the -2LL value indicates that the logistic regression
model used is better able to explain the relationship between the variables analyzed compared to the initial
model.
Nagelkerke Test Analysis (R2)
The Nagelkerke R Square is a modification of the Cox and Snell coefficients to ensure that its value varies
between 0 and 1. This test is conducted to assess how much variation in the dependent variable (business
sustainability) can be explained by variations in the independent variables (environmental performance and
financial performance). The Nagelkerke R² value can be interpreted like the R² value in multiple regression .
Table 4 Negelkerke (R2 Model Summary)
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
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Model Summary
Step -2 Log
likelihood
Cox &
Snell R
Square
Nagelkerke R
Square
1 41,878 a ,347 ,609
a. Estimation terminated at iteration number 9
because parameter estimates changed by less
than .001.
Source: SPSS Output Results, 2025
Table 4 shows the Cox & Snell R Square value of 0.347 and Nagelkerke R Square of 0.609 indicating how
much the independent variables in the model can explain the dependent variable. The Nagelkerke R Square
value is higher than the Cox & Snell R Square. shows that the model is able to explain approximately 60.9% of
the variation in the dependent variable, while the remaining 39.1% is influenced by other factors outside the
model.
Classification Table
The classification table shows the predictive power of the regression model to predict the probability of
occurrence of the dependent variable. The predictive power of the regression model to predict the probability
of occurrence of the dependent variable is expressed as a percentage.
Table 5 Classification Table
Classification Table a
Observed Predicted
Business
Sustainabili
ty
Percent
age
Correct
,00 1.00
Ste
p 1
Sustainabil
ity
Business
,00 9 6 60.0
1.0
0
5 80 94.1
Overall
Percentage
89.0
a. The cut-off value is 0.500
Source: SPSS Output Results, 2025
The classification table shows the predictive power of the regression model in predicting the probability of
business sustainability resulting from the company. The classification results show that the model used has a
fairly good predictive ability overall with an accuracy level of 89.0%. This model predicts two categories in
the business sustainability variable, namely class 0 (not sustainable) and class 1 (sustainable). From the
observation results, the model was able to classify 80 of 85 cases of the sustainable class correctly, resulting in
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an accuracy level of 94.1% for that class. However, for the unsustainable class, only 9 of 15 cases were
correctly classified, resulting in a lower accuracy of 60.0%. This indicates that the model is more effective in
recognizing sustainable businesses compared to those that are not.
Logistic Regression Model Formed and Hypothesis Testing
A logistic regression model can be formed by looking at the estimated parameter values in Variables in The
Equation . The regression model formed based on the estimated parameter values in Variables in The Equation
in 2011 is as follows:
Table 6 Logistic Regression Test
No Variables Variable Y Grade
B
Sig.
1 Environmental
Performance
Business
Sustainability
2,367 0.001
2 Financial
performance
Business
Sustainability
0.159 0.014
Source: SPSS Output Results, 2025
Table 6 shows the logistic regression equation in this study as follows:
Y = -7.475+ 2.367X1 +0.159X2 + e
Information :
Y = Business Sustainability
α = Constant
β = regression coefficient
X1 = Environmental Performance
X2 = Financial performance
e = Error term
The logistic regression equation can be explained as follows:
The environmental constant and financial performance) are zero, then business sustainability will decrease by -
7.475. With a significance value (Sig.) of 0.002, this constant has a significant role in the logistic regression
model.
The Environmental Performance B value of 2.367 indicates that every one unit increase in the environmental
performance variable will increase business sustainability by 2.367.
The Financial Performance B value of 0.159 indicates that every one unit increase in the financial performance
variable will increase business sustainability by 0.159.
The interpretation of the results of the proposed hypothesis tests H1 and H2 can be presented as follows:
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Environmental performance has a positive and significant impact on business sustainability
Based on table 4.7, it can be seen that the environmental performance variable has a significance value (Sig.)
of 0.001, this result indicates that the relationship is statistically significant because it is below the 0.05 limit.
In addition, the B coefficient is 2.367. This means that environmental performance (X1) has a positive and
significant effect on business sustainability (Y) in other words, H1 is accepted. Therefore, the first hypothesis
stating that environmental performance has a positive and significant effect on business sustainability is
proven.
Financial performance has a positive and significant impact on business sustainability
Based on table 6, it can be seen that the financial performance variable has a significance value (Sig.) of 0.014,
this relationship is also statistically significant, because it is smaller than 0.05. With a B value of 0.159. This
means that financial performance (X2) has a positive and significant effect on business sustainability (Y) in
other words, H2 is accepted . Therefore, the hypothesis that financial performance has a positive and
significant effect on business sustainability is proven.
Results of the Moderating Regression Test with the Absolute Difference Value Approach
The potential of moderating variables in increasing or decreasing the impact of independent variables on
dependent variables is tested using moderated regression analysis.
Table 7 Absolute Assumption Test
No Variables
Predictor
Variable Y Grade
B
Sig.
1 Environmental
Performance
Business
Sustainability
–
11,448
0.083
2 Financial
performance
Business
Sustainability
0.367 0.489
3 Disclosure
Carbon
Emissions
Business
Sustainability
–
76,912
0.036
4 X1 M Business
Sustainability
22,969 0.048
5 X2 M Business
Sustainability
–0.227 0.772
Source: SPSS Output Results, 2025
Table 7 shows the logistic regression equation in this study as follows:
Y= 38,690 -11,448X1 +0. 367X2 -76.912X3 + 22.969 X1X3 -0.227 X2X3 + e
Information :
Y : Corporate Sustainability
a : Constant
�� 1 : Regression coefficient X1
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�� 2 : Regression coefficient X2
�� 1 : Environmental Performance
�� 2 : Financial Performance
�� 3 : Carbon Emission Disclosure
X1X3 : Carbon Emission (interaction of variables X1 and X3)
X2X3 : Carbon Emission (interaction of variables X2 and X3)
�� : Standard Error
The constant value of B is 38.690, indicating that when all independent variables have a value of zero, the
business sustainability is 3.550.
Environmental Performance The B value of -11.448 indicates that environmental performance has a negative
relationship with the dependent variable, meaning that increasing environmental performance actually reduces
business sustainability.
The Financial Performance B value of 0.367 indicates that every one unit increase in the financial performance
variable will increase business sustainability by 0.367.
The B value of Carbon Emission Disclosure of -76.912 indicates that every one unit increase in the carbon
emission variable will reduce financial performance by -76.912.
The B value of the interaction between environmental performance and carbon emission disclosure of 22.969
shows that the interaction between environmental performance and carbon emission disclosure will increase
business sustainability by 22.969.
The B value of the interaction between financial performance and carbon emission disclosure of -0.227
indicates that the interaction between financial performance and carbon emission disclosure will reduce
business sustainability by -0.227.
The interpretation of the results of the proposed hypothesis tests H3 and H4 can be presented as follows:
Carbon Emission Disclosure can moderate the influence of environmental performance on business
sustainability.
Based on table 4.8, it can be seen that the moderating variable, namely X1 M, has a sig. value of 0.048, with a
B value of 22.969, this means that carbon emission disclosure strengthens the influence of environmental
performance on business sustainability or H3 is accepted . Therefore, the third hypothesis which states that
carbon emission disclosure moderates the influence of environmental performance on business sustainability is
proven.
Carbon Emission Disclosure cannot moderate the influence of Financial Performance on Business
Sustainability
Based on table 4.8, it can be seen that the moderating variable, namely X2 M, has a sig. value of 0.772. With a
B value of -0.227, this means that carbon emission disclosure cannot moderate the effect of environmental
performance on business sustainability or H4 is rejected . Therefore, the fourth hypothesis stating that carbon
emission disclosure can moderate the effect of financial performance on business sustainability is not proven.
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DISCUSSION OF RESEARCH RESULTS
Environmental Performance Has a Positive and Significant Impact on Business Sustainability
The relationship between environmental performance and business sustainability is gaining increasing
attention in business practice and academic research. Companies with strong environmental performance
demonstrate their ability to effectively manage their operational impacts on the environment, such as through
emissions reduction, energy efficiency, waste management, and compliance with environmental regulations.
This performance not only reflects a company's social responsibility but also serves as an important indicator
for maintaining good relationships with the community, government, investors, and other stakeholders.
The results of the study show a B value of Environmental Performance of 2.438, indicating that increased
environmental performance is positively related to an increase in the likelihood of an event occurring in the
dependent variable. With a significance value (Sig.) of 0.001, this result indicates that the relationship is
statistically significant because it is below the 0.05 limit. This means that environmental performance has a
positive and significant effect on business sustainability, in other words, H1 is accepted.
This research is in line with the legitimacy theory which identifies that the purpose of social responsibility
expressed by companies is to gain legitimacy from the operational environment, maximize long-term financial
strength, and be able to create harmony with public perception. This theory is also related to social disclosure
which implies that the reason why companies disclose their environmental activities is something that is
needed by the community in which the company operates, and failure to disclose can have detrimental
implications for the company. Therefore, companies that have more concern for the surrounding environment
will be considered to have a good image in the eyes of the community [26] .
This study reveals that environmental performance has a positive and significant impact on business
sustainability. Companies that implement environmentally friendly practices tend to reap long-term benefits,
including operational efficiency, regulatory compliance, and improved reputation among stakeholders.
Implementing a sound environmental strategy can mitigate legal and financial risks resulting from regulatory
violations, while also creating new opportunities in a market increasingly concerned with sustainability issues.
These findings align with several previous studies, such as the study by Kartina.
If a company's performance is not well-reviewed, it will face pressure and encouragement from stakeholders to
improve its environmental performance. A good environmental performance assessment can be used to inform
the public through annual reports and sustainability reports about the company's environmental performance.
This information is useful for investors when considering investment decisions (Fortuna and Putra, 2020).
Financial Performance Has a Positive and Significant Impact on Business Sustainability
Based on the research results, it can be concluded that financial performance has a positive and significant
effect on business sustainability. The B value for Financial Performance of 0.159 indicates that financial
performance is also positively related to the dependent variable, although with a smaller impact than
environmental performance. With a significance value (Sig.) of 0.014, this relationship is also statistically
significant, because it is smaller than 0.05. This means that financial performance has a positive and significant
effect on business sustainability, in other words, H2 is accepted .
In line with the Stakeholder theory first pioneered by Freeman (1984), Stakeholder theory explains that
companies have relationships with stakeholders who directly influence each other (between the company and
stakeholders) through the company's actions. This theory aims to have a strong bond between the company and
its stakeholders, so that sustainable success is achieved [18] .
Stakeholder theory emphasizes that corporate operations do not only work to meet financial goals, but must
also provide benefits to stakeholders to maintain operations carried out by organizations [27] . As a form of
corporate responsibility towards society and other stakeholders , companies are often involved in corporate
social responsibility activities. Society and stakeholders can provide a positive response to companies involved
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Page 470
in corporate social responsibility activities.
The research results show that financial performance has a positive and significant impact on business
sustainability. Companies with strong financial performance, reflected in high profitability, adequate liquidity,
and controlled debt management, have greater opportunities.
The positive response given by the community and stakeholders in the form of trust and acceptance of
products produced by the company, as a result, can improve the company's operations, and this will have
implications for increasing the company's financial performance. In line with Mastut's research) which
revealed that the results of hypothesis testing showed that financial performance has a positive and significant
influence on business sustainability. In line with research [29] which states that financial performance has a
positive and significant influence on the company's sustainable capabilities.
Carbon Emission Disclosure Can Moderate the Impact of Environmental Performance on Business
Sustainability
Based on the research results, it can be concluded that carbon emission disclosure can moderate the influence
of environmental performance on business sustainability. The B value of the interaction between
environmental performance and carbon emission disclosure of 22.969 indicates that the interaction between
environmental performance and carbon emission disclosure will increase business sustainability by 18.323.
The sig. value of 0.048 means that carbon emission disclosure strengthens the influence of environmental
performance on business sustainability or H3 is accepted .
The underlying theory of legitimacy is the "social contract" that exists between a company and the community
in which the company operates and uses economic resources. This contract states that the company will report
its social activities in order to gain recognition and acceptance from the community [30] . By having a good
image towards the environment in the eyes of the community, the company can be seen as helping the
sustainability of the business, where the community feels confident that the company's existence does not harm
the community or the environment. In this way, the company will reap good results because the community
does not reject the company's existence by implementing programs that prioritize sustainable development.
With clear disclosure, companies can enhance their credibility and accountability, thereby attracting more
sustainability-minded investors and strengthening relationships with customers and business partners.
Furthermore, disclosing carbon emissions contributes to compliance with increasingly stringent environmental
regulations, reducing legal and financial risks that could hinder business continuity. Therefore, transparency in
carbon emissions disclosure not only reflects a company's commitment to environmentally friendly business
practices but also reinforces the positive impact of environmental performance on long-term business
sustainability.
Carbon Emission Disclosure Cannot Moderate the Impact of Financial Performance on Business
Sustainability
Based on the research results, it can be concluded that carbon emissions cannot moderate the influence of
financial performance on business sustainability. The B value of the interaction between financial performance
and carbon emission disclosure of -0.227 indicates that the interaction between financial performance and
carbon emission disclosure will reduce business sustainability by 0.370. The sig. value of -0.227 means that
carbon emission disclosure is unable to strengthen the influence of financial performance on business
sustainability or H4 is rejected.
Disclosure of carbon emissions, such as revealing a company's responsibility for climate change-related
actions and the actions it will take to address them, reflects the company's business ethics. This way,
stakeholders will be able to understand the company's commitment to and concern for the environment,
allowing them to collectively address the company's potential environmental impacts .
The results of this study indicate that carbon emission disclosure cannot moderate the effect of financial
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performance on business sustainability. This means that the amount of carbon emissions produced by a
company does not strengthen or weaken the relationship between financial performance and business
sustainability. One of the main reasons is that business sustainability is often more influenced by other factors
such as business strategy, environmental innovation, and government regulations, rather than simply the level
of carbon emissions produced.
These results suggest that while carbon transparency is important for environmental legitimacy, a company's
financial performance may be more influenced by operational efficiency and investment strategy than by the
level of carbon disclosure. In the context of stakeholder theory, this suggests that investors still prioritize short-
term financial performance over environmental sustainability, weakening the moderating effect of carbon
emissions disclosure.
CONCLUSION
Environmental performance has a positive and significant impact on business sustainability. This demonstrates
that companies that implement environmentally friendly practices have a greater chance of long-term survival.
Environmental awareness can also help companies comply with regulations, improve operational efficiency,
and build a positive reputation among stakeholders.
Financial performance has a positive and significant impact on business sustainability, although its impact is
smaller than that of environmental performance. A positive public response to corporate social responsibility
can also improve financial performance and support business sustainability.
Disclosure of carbon emissions can strengthen the influence of environmental performance on business
sustainability. This means that companies with strong environmental performance and transparent disclosure
of their carbon emissions are better able to maintain long-term business sustainability.
Carbon emissions disclosure fails to strengthen the influence of financial performance on business
sustainability. This indicates that a company's disclosed carbon emissions levels do not directly moderate the
relationship between financial performance and business sustainability.
The results of this study emphasize the importance for mining companies to strengthen their environmental
management systems and expand transparent disclosure of carbon emissions. Management needs to integrate
sustainability strategies into operational practices and reporting to gain social legitimacy and investor trust.
Governments and regulators are advised to tighten carbon reporting policies and provide incentives for
companies with superior environmental performance. Future research could expand the sample to other sectors
such as energy, manufacturing, or services to compare sustainability levels across industries. Furthermore,
cross-country or cross-time period comparative studies could be conducted to understand the dynamics of
carbon disclosure in different economic contexts. Future researchers could also test other variables such as
corporate governance or green innovation as additional moderating factors.
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