The Trade-off Strategy between Financial and Environmental Performance: Assessment of Sustainable Value Added

FAISAL, Faisal (2018) The Trade-off Strategy between Financial and Environmental Performance: Assessment of Sustainable Value Added. International Journal of Energy Economics and Policy, 8 (1). pp. 5-11. ISSN 2146-4553

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Abstract

Corporate sustainability issue has considered the most important aspects as it reflects the corporate consideration to environmental, social, and economic dimension. However, using trade-off strategy to assess the relationship between financial performance and environmental performance has not been implemented. The aim of this study was to apply an integrated analysis of trade-off strategy to assess the relationship between financial performance and environmental performance. The method was used Autoregressive to analyze the relationship between return on asset (ROA) as financial performance and eco-efficiency (EE) as environmental performance. The samples were business sectors non-financial listed in Nikkei225 in the period of 2005–2014. The result showed that EE significantly relates to ROA as shown by Granger Causality Test, and their relationship appeared to three sectors of business: Consumer discretionary, industrials, and materials. EE significantly related to current financial performance, and the previous year financial performance. The impact of EE on the current financial performnace appeared only to sector of business consumer discretionary. the investigation applied opportunity cost to assess sustainable value added and to describe the causality between financial performance and environmental performance as well as the trade-off strategy. It is expected that this finding might be considered an environmental management accounting tool to weigh the environmental impacts at different points to life cycle of company.

Item Type:Article
Additional Information:Trade off Strategy, Financial Performance, Environmental Performance, Sustainable Value Added, Opportunity Cost, Eco-efficiency, Autoregressive
Uncontrolled Keywords:Trade off Strategy, Financial Performance, Environmental Performance, Sustainable Value Added, Opportunity Cost, Eco-efficiency, Autoregressive
Subjects:H Social Sciences > HF Commerce > HF5601 Accounting
Divisions:Faculty of Economics and Business > Department of Accounting
ID Code:73991
Deposited By:Mr. Perpustakaan Fakultas Ekonomi
Deposited On:11 Jul 2019 14:27
Last Modified:11 Jul 2019 14:27

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