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Section Financial Accounting

The Effect of Environmental Accounting Disclosure, Corporate Social Responsibility, and Digital Innovation on the Financial Performance

Vol. 11 No. 1 (2027): January:

Assyifa Hasanah Amaliah (1), Abin Suarsa (2), Wasifah Hanim (3)

(1) Universitas Muhammadiyah Bandung, Indonesia
(2) Universitas Muhammadiyah Bandung, Indonesia
(3) Universitas Muhammadiyah Bandung, Indonesia
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Abstract:

General Background: Rapid technological development and industrial expansion have exacerbated environmental challenges, thereby increasing the importance of environmental accountability in the banking sector. Specific Background: Disclosure of environmental reports, corporate social responsibility (CSR) and digital innovation are increasingly recognised as mechanisms for enhancing transparency, organisational legitimacy, stakeholder trust and financial performance. Knowledge Gap: However, empirical evidence examining these three dimensions simultaneously in the banking sector using recent multi-year data remains limited. Objective: This study examines the impact of environmental accounting disclosures, CSR, and digital innovation on the financial performance of banks listed on the Indonesia Stock Exchange during the period 2022–2024. Methods: A quantitative causal research design was employed using multiple regression analysis, in which environmental accounting disclosures, CSR disclosures and digital innovation were treated as independent variables, whilst financial performance served as the dependent variable. Results: Environmental accounting disclosures and digital innovation have a significant negative impact on financial performance, whilst CSR has a significant positive impact. Novelty: This study develops an integrated framework combining environmental accounting, CSR and digital innovation to explain banks’ financial performance. Implications: These findings suggest that environmental accounting and digital innovation may incur short-term costs, whilst CSR strengthens stakeholder trust and legitimacy, highlighting the importance of integrating these dimensions to support sustainable financial value creation.

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