




































74 

 

Finance, Accounting and Business Analysis 
Volume 3 Issue 1, 2021 

http://faba.bg 

Environmental Performance and Company Size on the Financial 

Performance of Sharia Companies in Indonesia 

Nur Wahyu Ningsih, Rego Putrawan, Evi Ekawati, Ahmad Isnaeni  

Department of Sharia Accounting, Universitas Islam Negeri Raden Intan, Bandar Lampung, Indonesia 

Info Articles  
 

Abstract 

History Article: 
Submitted 14 January 2021 
Revised 9 March 2021 
Accepted 21 April 2021 

 
Measuring financial performance is important to do. It aims to evaluate the 
efficiency and effectiveness of the company in generating profits. Basically, there are 
many factors that affect financial performance, but in this study it is only limited to 
the influence of environmental performance and company size on financial 
performance. This type of research is a causal associative quantitative research using 
secondary data sourced from the annual reports of mining sector companies listed 
on the Indonesian Sharia Stock Index (ISSI) for the 2014-2019 period. The 
population in this study was all mining companies registered on the ISSI. The 
sampling technique used purposive sampling technique and obtained a sample of 
72. The data analysis method uses panel data regression with Eviews 10. The results 
of this study indicate that environmental performance has no effect on financial 
performance, while firm size has an effect on financial performance. Simultaneously 
environmental performance and company size affect financial performance. 

Keywords:  
Environmental Performance, 
Company size, Financial 
Performance  

 

  

   

*Address Correspondence:   
E-mail: nurwahyu@radenintan.ac.id 
 
 

 

 



Nur Wahyu Ningsih et al. / Finance, Accounting and Business Analysis 3 (1) 2021 

 

75 
 

INTRODUCTION 
 

Measuring financial performance is important to do. This aims to evaluate the efficiency and 

effectiveness of the company in generating profits. By measuring financial performance, it can be seen the 

prospects for growth and financial development of the company. A company is said to be successful if the 

company has achieved a certain predetermined performance. The company's financial performance can be 

used as a means or indicator in order to improve the company's operational activities. With the 

improvement in operational performance, it is hoped that the company can experience better financial 

growth and be able to compete with other companies. Many factors can affect the company's financial 

performance. Therefore the company should be able to optimize these factors in order to further improve 

its financial performance. By knowing what factors affect financial performance, the company can 

establish an accurate strategy so that the targeted financial performance will be easier to achieve. However, 

this research is limited to examining the effect of environmental performance and company size on 

financial performance. 

Environmental performance can be interpreted as steps to provide protection to the environment 

or ecosystem. The environment is one part of the company that cannot be ignored and must be an integral 

part of the company's business activities. Therefore, the environment should be treated as any other 

stakeholder in the company. The survival of the company is very dependent on the safety and preservation 

of the environment. For now, the company's concern for the environment is one aspect that needs 

attention. This is in accordance with the Minister of Environment Regulation Number 03 of 2014 

concerning the Company Performance Rating Program in Environmental Management or known as 

PROPER. One of the studies linking environmental performance with financial performance is research 

conducted by (Ikhsan & Muharam, 2016). The results of this study indicate that environmental 

performance partially and simultaneously has a significant effect on financial performance. This is 

different from research conducted by (Putra, 2017) which states that environmental performance has no 

effect on financial performance.  

The next factor is the size of the company, while what is meant by company size is a scale where 

the size of the company can be categorized based on total assets, sales and so on. Large-scale companies 

are generally better known by the wider community when compared to companies that are small in size 

and are usually able to survive for a long time. In addition, because it is better known, there is more 

information about large companies than small companies. If a lot of information is in the hands of 

investors, then the level of investor uncertainty about the future of the company can be known. The 

research that links company size to financial performance is research conducted by (Tambunan & 

Prabawani, 2018). The results of this study indicate that company size has no effect on financial 

performance. This is different from research conducted by Wufron in 2017 which stated that company size 

has an influence on financial performance. 

In this research, it focuses on mining sector companies listed in ISSI since mining sector 

companies are more appropriate to use and more representative of the independent variables in this study, 

namely environmental performance and company size. The mining industry is an unsustainable industry 

because it depends on non-renewable resources. Environmental management in mining operations should 

cover all phases of the mining activity, from the exploration phase to the production phase to post mine 

closure. The phenomenon that occurs in the mining industry in Indonesia is that mining companies have 

the immunity to disobey environmental regulations and can pollute freely without fear of sanctions, such 

as violations committed by several mining companies that do not comply with environmental regulations, 

namely PT. . Barisan Tropical Mining (owned by Laverton Gold Auatralia) in South Sumatra, PT. Indo 

Moro Kencana (owned by Aurora Gold Australia), PT. Newmont Minahasa Raya (owned by Newmont 

USA). And PT. Kelian Equatorial Mining (owned by British-Australian Rio Tinto). Global issues such as 

environmental protection, responsible supply of materials and the welfare of communities around mining 

areas will be of particular concern to the government in the future. The government will seriously push for 

these agendas, while non-governmental organizations will be more critical of all forms of environmental 

damage. The government has a big task to reposition the mining industry as a lever of the local and 

regional economy, not just as an object of activity that generates state revenue. For this reason, the 

government will encourage mining and mineral companies to play a more strategic role in maximizing the 

development and empowerment of communities around the operating area. There are 27 mining sector 

companies listed on the Indonesian Sharia Stock Index (ISSI) consecutively in the 2014-2019 period. The 

companies are as follows: 

 

 

 

 



Dimiter Nenkov / Finance, Accounting and Business Analysis 3 (1) 2021 

76 

 

 

Table 1. Mining Companies Listed on ISSI 2014-2019 

Name of Company Code 

Adro Energy Tbk ADRO 

Aneka Tambang Tbk ANTM 

Atlas Resources Tbk ARII 

Ratu Prabu Energy Tbk ARTI 

Bumi Resources Minerals Tbk BRMS 

Barmulti Sukses Sarana Tbk BSSR 

Bayan Resources Tbk BYAN 

Citatah Tbk CTTH 

Darma Henwa Tbk DEWA 

Dian Swastatika Sentosa Tbk DSSA 

Elnusa Tbk ELSA 

Alfa Energi Investama Tbk FIRE 

Golden Energi Mines Tbk GEMS 

Garda Tujuh Buana Tbk GTBO 

Harum Energi Tbk HRUM 

Vale Indonesia Tbk INCO 

Indo Tambang Raya Megah Tbk ITMG 

Resource Alam Indonesia Tbk KKGI 

Mitrabara Adiperdana Tbk MBAP 

Samindo Resources Tbk MYOH 

Bukit Asam Tbk PTBA 

Petrosea Tbk PTRO 

Radiant Utama Interinsco Tbk RUIS 

Golden Eagle Energy Tbk SMMT 

SMR Utama Tbk SMRU 

Toba Bara Sejahtra Tbk TOBA 

Kapuas Prima Coal Tbk ZINC 

Source: processed data, 2021 

 

The formulation of the problems in this study are: 1). Does environmental performance affect 

financial performance?, 2). Does company size affect financial performance? 3). Do environmental 

performance and company size jointly affect financial performance? Based on the formulation of the 

problem, the objectives of this study are: 1). To determine the effect of environmental performance on 

financial performance, 2). To determine the effect of company size on financial performance, 3). To 

determine the effect of environmental performance and company size together on financial performance. 

 

 Stakeholder Theory 
According to (Kriyantono, 2014) Stakeholder theory pays attention to the concept of who is at risk 

of being influenced or potentially influencing organizational activities. Stakeholders can be defined as 

individuals, groups, or organizations, directly or indirectly, who have the potential or possibility to 

influence the activities of the organization. This stakeholder theory reminds managers to pay attention to 

all people and groups who can be influenced or influence the goals of the company. 

 

Legitimacy Theory 
In accordance with (Utomo, 2019), Legitimacy theory is a theory that focuses more on the 

interaction of relationships between organizations and society. Legitimacy is a management system that is 

oriented on taking the side of the company towards the community. Legitimacy theory explains the social 

contract relationship between the company and the community, where the company must have integrity in 

implementing ethics in doing business and increase social and environmental responsibility, so that the 

company can be accepted by its existence in the community. Legitimacy is considered important for the 

company because the community's legitimacy to the company is a strategic factor for the company's future 

development. 

 

Sharia Enteprise Theory 
Sharia Enterprise Theory states that accountability is carried out not only to the company, but also 

to wider stakeholders. Sharia Enterprise Theory includes Allah, humans and nature, where Allah is the 

highest and the only goal of human life. Humans are required to be responsible for all activities to Allah 



Dimiter Nenkov / Finance, Accounting and Business Analysis 3 (1) 2021 

77 

 

vertically, then continue in the form of horizontal accountability to other humans and the natural 

environment. 

 

The Indonesian Sharia Stock Index 
The Indonesian Sharia Stock Index (ISSI), which was launched on 12 May 2011, is a composite 

index of Islamic stocks listed on the IDX. ISSI is an indicator of the performance of the Indonesian Islamic 

stock market. ISSI constituents are all Islamic shares listed on the IDX and included in the List of Sharia 

Securities (DES) issued by the OJK. This means that the IDX does not select sharia stocks that are 

included in ISSI. The ISSI constituents are reselected twice a year, every May and November, following 

the DES review schedule. Therefore, every selection period there are always sharia stocks that leave or 

enter into ISSI constituents. The ISSI calculation method follows other IDX stock index calculation 

methods, namely the weighted average of market capitalization using December 2017 as the base year for 

calculating the ISSI 

 

Environmental Performance 

Based on (Parmawati, 2018) the company's environmental performance is a company's 

performance in creating a good environment. The number of environmental issues that have developed 

has prompted the creation of a standard that regulates environmental disclosure issues, with the hope that 

companies have an obligation to convey more accurate information about their environmental 

performance. This standard has been applied in several countries in the world such as America and 

Australia. Meanwhile in Indonesia, the Indonesian Accounting Association has prepared a disclosure 

standard for environmental accounting in the Statement of Financial Accounting Standards (PSAK) No. 

32 (Forestry Accounting) and 33 (General Mining Accounting), this will help as a basis and guidance in 

preparing environmental accounting reports. With the result that every company is required to have 

concern for the environment. 

H1 : There is a significant influence between environmental performance and financial 

performance 

 

Company Size 

By (Sawir, 2004) the size of the company can determine the level of ease with which the company 

obtains funds from the capital market. Small companies generally lack access to an organized capital 

market, for both bonds and stocks. If the issuance of securities can be made, the securities of small 

companies may not be marketable and require pricing in such a way as to allow investors to obtain higher 

returns. So basically the bigger a company is, the easier it will be for the company to get funding. 

H2: There is a significant influence between company size and financial performance 

 

Financial Performance 

In (Kawatu, 2004), Basically, financial performance can be interpreted as the ability of a company 

to earn a profit. Financial performance can be reflected in the balance sheet financial statements, budget 

realization reports and cash flow reports. Financial reports need to be analyzed in order to provide an 

overview of financial performance. Financial statement analysis is an activity to interpret the numbers in 

financial statements in order to assess financial performance, where the results of the analysis will be used 

as a basis for economic, social or political decision making. Financial statement analysis requires certain 

techniques so that the analysis is useful for decision making. There are several financial statement analysis 

techniques, including financial ratio analysis. 

 

METHODS 

 

Research Design 

Return on Asset 
Measurement of the company's financial performance in this study uses the Return on Asset 

(ROA) ratio. What is meant by return on assets is the comparison between net income and total assets. 

This ratio shows how much net profit the company gets when measured from the value of its assets. The 

return on asset ratio can be formulated as follows : 

 

    
          

           
 

Environmental Performance 

An environmentally friendly economy is a positive thing that can be felt by all parties or 

generations. So far there have been many criticisms stating that the existing economy is still not in favor of 



Dimiter Nenkov / Finance, Accounting and Business Analysis 3 (1) 2021 

78 

 

the environment. Even the production process has led to a lot of degradation of land in nature. This is 

because at first the economy did not talk about environmental problems because the environment was 

considered an external factor and as a free good. So that in the process we need an institution and an 

instrument that can maximize the use of natural resources in the economic process without destroying and 

reducing its quality for future generations. The environment is so important for now that the government 

issued a regulation, namely Law no. 03 of 2014 concerning the Company Performance Rating Program in 

Environmental Management or what is known as PROPER. In this study, environmental performance is 

measured based on the PROPER assessment conducted by the Ministry of Environment. The 

environmental performance measurement in this study is according to the PROPER rating, which is as 

follows: 

 

Tabel 2. Rate of  PROPER 

Color Note Score 

Gold Excellent 5 

Green Very Good 4 

Blue Good 3 

Red Poor 2 

Black Very Poor 1 

Source: processed data, 2021 

 

Company Size 
Basically, the size of the company can be divided into three, namely small companies, medium 

companies and large companies. Company size can be seen from total assets, total sales, total employees, 

and so on. The greater the total assets or total net sales, the greater the size of the company. The bigger the 

asset, the greater the invested capital. Meanwhile in this study, to measure the size of the company seen 

from the total assets owned. The formula is as follows: 

 

                            ) 
 

Sample Selection 

The population of this research is the mining sector companies listed on the Indonesian Sharia 

Stock Index (ISSI) consecutively in the 2014-2019 period, totaling 27 companies. The research sample 

consisted of 12 companies in the 2014-2019 period. 

 

Data Analysis Method 

This research uses normality test, classic assumption test, Eviews 10 panel data regression test, 

and T test. 

 

RESULT AND DISCUSSION 

 

First Hypothesis Testing 

The results of the normality test are presented in table 3 below: 

 

Table 3. Result of Normality Test 

Normality Test 

    Sample 2014-2019 

Observations 72 

Probability 0.361141 

Source: Data processed by Eviews 10, 2021 

 

Based on table 3 above, it can be seen that the probability value is 0.361141. So based on these 

data it can be concluded that the model in this study is normally distributed, as the probability value of 

0.361141 is greater than 0.05. The results of the normality test are presented in table 4: 

 

  



Dimiter Nenkov / Finance, Accounting and Business Analysis 3 (1) 2021 

79 

 

Table 4. Result of Partial Test Model Fixed Effect 

Variable Coefficient Std. Error t-Statistic Prob.   

     
     C -79.86317 30.28824 -2.636772 0.0107 

LOGKL 0.330017 0.822056 0.401453 0.6896 

LOGUP 26.07535 10.37895 2.512332 0.0148 

Source: Data processed by Eviews 10, 2021 

 

Based on the results of testing the first hypothesis (H1), it states that environmental performance 

variables have no influence on the financial performance of mining sector companies listed on the 

Indonesian Sharia Stock Index (ISSI) for the 2014-2019 period. This is indicated by the probability value of 

environmental performance amounting to 0.6896 with a t-statistic value of 0.401453. For the probability 

value is 0.6896> 0.05, the first hypothesis in this study is rejected, which means that the environmental 

performance of a mining sector company has no influence on its financial performance. 

 

Second Hypothesis Testing 

Based on the results of testing the second hypothesis (H2), it states that the company size variable 

has a positive and significant effect on the financial performance of mining sector companies listed on the 

Indonesian Sharia Stock Index (ISSI) for the 2014-2019 period. This is indicated by the probability value of 

the Company Size of 0.0148 with a t-statistic value of 2.512332. From these data, it can be concluded that 

the company size variable has a positive and significant effect on the financial performance of mining 

sector companies listed on the ISSI since the probability value is 0.0148 <0.05.  

 

First Hypothesis Discussion  

The relationship between the theory of legitimacy and environmental performance is that the 

company's operations must be in accordance with the expectations of the community and the environment 

so that there is no shift and mismatch between the company and the surrounding environment. The 

rationale for legitimacy theory is that companies will continue to exist if society realizes that the 

organization operates for a value system that is commensurate with the community's own value system. 

Legitimacy theory suggests companies to ensure that their activities and performance can be accepted by 

society. Companies can use their annual reports to illustrate the impression of environmental 

responsibility, so that they are accepted by the community. That way, even though the environmental 

performance of a company in the mining sector is getting better, it does not have an impact on its financial 

performance. The measurement used in assessing environmental performance in this study is to use proper 

ranking by giving a score according to the ranking obtained. Based on the results of this study, although 

the company has the best proper rating, this does not have an impact on its financial performance. 

The results of this study are in line with previous research conducted by (Setyaningsih, 2016), the 

results of this study also state that environmental performance has no influence on the company's financial 

performance. In addition, the results of this study are also in line with research conducted by (Meiyana & 

Aisyah, 2019), this study also states that environmental performance has no influence on financial 

performance. 

 

Second Hypothesis Discussion 
Stakeholder theory states that a company is systematically responsible for all parties involved in the 

company. Based on this, it can be concluded that the bigger the company, the more parties involved in the 

company. Companies with large sizes are more easily recognized by the public and relatively easier to 

obtain funding from the public compared to small-scale companies. Therefore, the bigger the company, the 

greater the company's responsibility to the parties concerned. So based on these results it can be said that 

the bigger a company, the better its financial performance will be. When a company is categorized as a 

large company, its financial performance can also be said to be good, since basically the bigger a company 

is, the easier it will be for the company to obtain capital and trust from other parties such as investors and 

so on so that it can improve financial performance of a company. 

The results of this study are in line with previous research conducted by (Castelia et al., 2013), the 

results of this study state that company size has an influence on financial performance. In addition, 

previous research which is also in line with the results of this study is research conducted by (Setiawan, 

2018), the results of this study state that company size has an influence on the company's financial 

performance. 

 

 

 



Dimiter Nenkov / Finance, Accounting and Business Analysis 3 (1) 2021 

80 

 

CONCLUSION 
 

Based on the results of the analysis, the conclusions of this study are as follows: Environmental 

performance has no effect on the financial performance of mining companies listed on the Indonesian 

Sharia Stock Index (ISSI) for the 2014-2019 period and company size has a positive and significant impact 

on the financial performance of mining companies listed on the Indonesian Sharia Stock Index (ISSI) for 

the 2014-2019 period. 

 

REFERENCES 
 
Castelia, Y., Arisadi, & Djazuli, A. (2013). Pengaruh Ukuran Perusahaan, Umur Perusahaan, Current 

Ratio, Debt to Equity Ratio, dan Fixed Asset to Total Asset Ratio Terhadap Kinerja Keuangan Pada 

Perusahaan Manufaktur di Bursa Efek Indonesia. Jurnal Aplikasi Manajemen, 11(4), 567–740. 

Ikhsan, A. A. N., & Muharam, H. (2016). Pengaruh Kinerja Lingkungan Terhadap Kinerja Keuangan: 

Studi Pada Perusahaan Yang Terdaftar di Kementerian Lingkungan Hidup dan Listing di BEI. 
Diponegoro Journal Of Management, 5(3), 11. 

Kawatu, F. S. (2004). Analisis Laporan Keuangan Sektor Publik. Deepublish. 

Kriyantono, R. (2014). Teori-Teori Public Relations Perspektif Barat dan Lokal: Aplikasi Penelitian dan Praktik. 

Kencana. 

Meiyana, A., & Aisyah, M. N. (2019). Pengaruh Kinerja Lingkungan, Biaya Lingkungan dan Ukuran 

Perusahaan Terhadap Kinerja Keuangan Dengan Corporate Social Responsibility Sebagai Variabel 

Intervening (Studi Empiris Pada Perusahaan Manufaktur Yang Terdaftar di Bursa Efek Indonesia 

Tahun 2014 -. Jurnal Nominal, 7(1), 1–18. 

Parmawati, R. (2018). Ecology, Economy, Equity (Sebuah Upaya Penyeimbang Ekologi dan Ekonomi). UB Press. 

Putra, Y. P. (2017). Pengaruh Kinerja Lingkungan Terhadap Kinerja Keuangan Dengan Pengungkapan 

Corporate Social Responsibility (CSR) Sebagai Variabel Intervening. Jurnal Ekonomi Dan Bisnis 

Universitas Muhammadiyah Bengkulu, 2(2), 228. 

Sawir, A. (2004). Kebijakan Pendanaan dan Restrukturasi Perusahaan. PT. Gramedia Pustaka. 

Setiawan, W. (2018). Pengaruh Kinerja Lingkungan, Biaya Lingkungan dan Ukuran Perusahaan 

Terhadap Kinerja Keuangan Dengan Corporate Social Responsibility (CSR) Sebagai Variabel 

Intervening (Studi Kasus Pada Perusahaan Manufaktur Yang Terdaftar di Bursa Efek Indonesia 

Tahun 20. Journal Of Accounting, 1(1), 1–12. 

Setyaningsih, R. D. (2016). Pengaruh Kinerja Lingkungan Terhadap Kinerja Keuangan Dengan Corporate 

Social Responsibility Sebagai Pemoderasi. Jurnal Ilmu Dan Riset Akuntansi, 5(4), 1–15. 

Tambunan, J. T. A., & Prabawani, B. (2018). Pengaruh Ukuran Perusahaan, Leverage dan Struktur Modal 

Terhadap Kinerja Keuangan Perusahaan (Studi Pada Perusahaan Manufaktur Sektor Aneka 
Industri Tahun 2012-2016). Diponegoro Journal of Social and Politic, 2(2), 8. 

Utomo, M. N. (2019). Ramah Lingkungan dan Nilai Perusahaan. CV. Jakad Publishing. 

 

 

 

 

 

 


