Integrating Islamic Business Ethics and Environmental Sustainability: Evidence of Green Accounting, Carbon Emission Disclosure, and Islamic Social Reporting Impacts on Firm Value
DOI:
https://doi.org/10.32332/ijie.v8i02.13483Keywords:
Carbon Emission Disclosure; Firm Value; Green Accounting; Islamic Social Reporting; Jakarta Islamic Index 70.Abstract
Objective: This study aims to examine the influence of environmental and Islamic ethical disclosure dimensions, namely Green Accounting, Carbon Emission Disclosure, and Islamic Social Reporting (ISR), on firm value among companies listed on the Jakarta Islamic Index 70 (JII70). This research seeks to provide empirical evidence regarding whether environmental cost transparency, carbon emission accountability, and sharia-based social responsibility disclosures contribute to investor valuation. Method: This study applies a quantitative approach using secondary data from annual reports, sustainability reports, and financial statements of JII70 companies during 2023–2024. The sample was selected using purposive sampling, resulting in 32 companies with 64 observations. Data were analyzed using multiple linear regression with SPSS 25, while firm value was measured using Tobin’s Q. Results: The results show that Green Accounting has a significant negative effect on firm value, indicating that environmental costs are still perceived as financial burdens by investors. Meanwhile, Carbon Emission Disclosure and Islamic Social Reporting have no significant effect on firm value. The research model explains 59.2% of the variation in firm value. Implications: Companies need to optimize environmental and social disclosure strategies to transform sustainability practices into long-term value creation. Regulators should also strengthen sustainability reporting standards to improve the relevance of non-financial information in investment decisions. Originality or Novelty: This study contributes by integrating financial-environmental, physical-environmental, and Islamic ethical dimensions into a single framework. It focuses on the highly liquid JII70 index during the early implementation phase of the Indonesia Carbon Exchange, providing new evidence on sharia investor responses toward sustainability practices.
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