Synergy Of Financial Performance And Firm Value Through CSR In Mining, Energy, And Oil And Gas Companies

Abstract

Environmental issues are one of the crucial issues in Indonesia, including hazardous waste pollution. The main objective of this research is to examine the mediating role of Corporate Social Responsibility (CSR) in the relationship between financial performance and firm value in the Mining, Energy, Oil and Gas (PEM) company sector listed on the Indonesia Stock Exchange (IDX) during the 2019-2023 period. This research uses secondary data obtained from annual reports and corporate sustainability reports with the independent variable of financial performance (Return on Assets/ROA), the dependent variable of firm value (Tobin's Q), and the mediating variable of CSR. Companies implement CSR to gain social legitimacy from society as well as to signal that the company is committed to quality and sustainability. ROA is a signal in showing the company's financial condition. This research uses quantitative methods, using SmartPLS as an analytical tool. The results show that financial performance has a positive and significant impact on firm value. In addition, this research also revealed that financial performance also has a positive, albeit insignificant influence on CSR. While CSR is found to have a positive and significant influence on firm value, it is not able to mediate the relationship between financial performance and firm value.