Page 86 - IJES Special Issues for AIEC2016

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Environmental Management Activity toward Financial

Performance in Indonesian Mining Companies

Farah Dina*, Lindrianasari, and Yuztitya Asamaranti
Economic and Business Faculty, Lampung University, Indonesia

International Journal of Abstract. The objective of this study is to determine the influence of environmen-
Environment and tal management activity based on Indonesia’s statement of financial accounting
Sustainability [IJES] standards number 33, namely accounting for mining towards the financial per-
ISSN 1927-9566 formance of Indonesian mining companies. The measurement of environmental
Vol. 5 No. 1, pp. 76-85 activity was proxied by three environmental activity. They are disclosure of strip-
(2016) ping costs in the production phase, exploration and evaluation of assets and en-
vironmental management on general mining.

There are 41 samples of this research consisting of all mining companies in Indo-
nesia that have fulfilled the sample criteria from 2011 until 2013. The data on this
research was tested by multiple linear regression. The result of this research
showed that the stripping costs in the production phase and environmental man-
agement on general mining had significantly positive effects on financial perfor-
mance, while exploration and evaluation assets had significantly negative effects
on financial performance.

This study shows that the cost to acquire the best technology that companies use
when performing exfoliating ground at the beginning of production activity
brings a positive performance for the company. Similarly, environmental man-
agement implemented in the company also had a positive impact for the survival
of the company. These results indicate that the company implemented best act in
the management of the environment, increasing the company's performance. The
consequence of all this is the sustainability of the company is increasingly as-
sured.

Keywords. environmental activity, Indonesia Statement of Financial Accounting

Standards number 33, accounting for mining, exploration and evaluation of assets,

*Correspondence: financial performance

farahdinaaa@yahoo.com

1. Introduction be implemented. A company’s image in society,
not only as economic actor but also as social ac-
Environmental problems are an important topic tor. The company’s responsibility to the environ-
in global economics. This is evident from the de- ment can also be seen as a business strategy for
velopment of environmental regulations that long-term investment decisions, as a company’s
aim to create environmental protection and sus- commitment to the environment can affect its
tainable development. Responsibility about a competitiveness. The long-term environmental
company’s environment is very important for cost that should be paid will make a company
sustainability of the company. A company’s ac- gets investor’s positive response in the form of
counting is expected to reveal some findings in the expanding of market share.
an annual report regarding allocation of environ-
mental costs, such as some accounts with envi- Mining is one of the industrial sectors in which
ronmental cost. the production activity is directly related to the

A company’s responsibility to the environment is
a moral obligation and a constitution that must