Main Article Content

Sari Dewi
Natalia Harini


This study aims to identify the relationship between the Level of Environmental Financial Accounting Practices (EFAP) and the Cost of Capital. The audit results from the financial statements and the Sustainability Report from the 2016 – 2019 period are secondary data used in the research. Fulfillment of the criteria to be used as a research sample amounted to 56 companies which were then tested using the Eviews 10 program. The study proved that company size (SIZE) had a significantly negative effect on the Cost of Equity Capital. Market to Book Ratio (MTB), Return on Assets (ROA), Cash Flow Operations (CFO), Cash Ratio (CR), and Net Loss (LOSS) have no significant effect on the Cost of Equity Capital. Company size (SIZE), Leverage (LEV), and Net Loss (LOSS) have a significant effect on the Cost of Debt Capital in addition, Environmental Financial Accounting Practices (EFAP), Market to Book ratio (MTB), Return on Assets (ROA), Cash Flow Operations (CFO), and Cash Ratio (CR) have no significant effect on the Cost of Debt Capital.


Download data is not yet available.

Article Details

How to Cite
Dewi, S. and Harini, N. (2021) “The Effect of Environmental Financial Accounting Practices on the Cost of Capital in Public Companies Listed on the Indonesia Stock Exchange”, Jurnal Mantik, 5(2), pp. 919-931. doi: 10.35335/jurnalmantik.Vol5.2021.1421.pp919-931.
[1] K. Stechemesser and E. Guenther, “Carbon accounting: A systematic literature review,” J. Clean. Prod., vol. 36, pp. 17–38, 2012, doi: 10.1016/j.jclepro.2012.02.021.
[2] N. Huu Anh, N. La Soa, and H. H. Hanh, “Environmental accounting practices and cost of capital of enterprises in Vietnam,” Cogent Econ. Financ., vol. 8, no. 1, 2020, doi: 10.1080/23322039.2020.1790964.
[3] K. C. Lin and X. Dong, “Corporate social responsibility engagement of financially distressed firms and their bankruptcy likelihood,” Adv. Account., vol. 43, no. April, pp. 32–45, 2018, doi: 10.1016/j.adiac.2018.08.001.
[4] L. Cai, J. Cui, and H. Jo, “Corporate Environmental Responsibility and Firm Risk,” no. March, 2015, doi: 10.1007/s10551-015-2630-4.
[5] N. C. L. Poddi and S. Vergalli, “Corporate Social Responsibility and Firms’ Performance: a Strategic Graphical Analysis,” J. Int. Bus. Econ., vol. 4, no. 1, pp. 1–12, 2016, doi: 10.15640/jibe.v4n1a1.
[6] I. Oikonomou, C. Brooks, and S. Pavelin, “The effects of corporate social performance on the cost of corporate debt and credit ratings,” Financ. Rev., vol. 49, no. 1, pp. 49–75, 2014, doi: 10.1111/fire.12025.
[7] S. El Ghoul, O. Guedhami, C. C. Y. Kwok, and D. R. Mishra, “Does corporate social responsibility affect the cost of capital?,” J. Bank. Financ., vol. 35, no. 9, pp. 2388–2406, 2011, doi: 10.1016/j.jbankfin.2011.02.007.
[8] S. Xu, D. Liu, and J. Huang, “Corporate social responsibility, the cost of equity capital and ownership structure: An analysis of Chinese listed firms,” Aust. J. Manag., vol. 40, no. 2, pp. 245–276, 2015, doi: 10.1177/0312896213517894.
[9] A. Jha and J. Cox, “Corporate social responsibility and social capital,” J. Bank. Financ., vol. 60, pp. 252–270, 2015, doi: 10.1016/j.jbankfin.2015.08.003.
[10] S. Deny, “Terbukti Cemari DAS Citarum, Perusahaan Ini Kena Denda Rp 12 Miliar,”, 2020.
[11] U. Faruq, “Menilik Kronologis Tragedi 13 Tahun Lumpur Lapindo,”, 2019.
[12] Mardians, “Sungai Ciujung Tercemar Limbah PT. Indah Kiat Pulp & Paper (IKPP),”, 2013.
[13] T. S. & D. A. Boestami, “Ganti Rugi Rp1 Triliun, National Sago Prima Ajukan Banding,”, 2016.
[14] Undang-Undang Republik Indonesia Nomor 40 Tahun 2007 Tentang Perseroan Terbatas. Indonesia:, 2007.
[15] U. RI, “Perlindungan dan Pengelolaan Lingkungan Hidup,” ??????, vol. ? ????, no. ?? ??????, p. ????????, 2009, [Online]. Available:
[16] M. Mangena, R. Pike, and J. Li, Intellectual Capital Disclosure Practices and Effects on the Cost of Equity Capital?: UK Evidence, vol. 44, no. 0. 2010.
[17] B. Cheng, I. Ioannou, and G. Serafeim, “Corporate social responsibility and access to finance,” Strateg. Manag. J., vol. 35, no. 1, pp. 1–23, 2014, doi: 10.1002/smj.2131.
[18] C. Reverte, “The Impact of Better Corporate Social Responsibility Disclosure on the Cost of Equity Capital,” Corp. Soc. Responsib. Environ. Manag., vol. 19, no. 5, pp. 253–272, 2012, doi: 10.1002/csr.273.
[19] T. Mavlanova, R. Benbunan-Fich, and M. Koufaris, “Signaling theory and information asymmetry in online commerce,” Inf. Manag., vol. 49, no. 5, pp. 240–247, 2012, doi: 10.1016/
[20] S. Dutta and A. Nezlobin, “Information disclosure, firm growth, and the cost of capital,” J. financ. econ., vol. 123, no. 2, pp. 415–431, 2017, doi: 10.1016/j.jfineco.2016.04.001.
[21] C. C. Yeh, F. Lin, T. S. Wang, and C. M. Wu, “Does corporate social responsibility affect cost of capital in China?,” Asia Pacific Manag. Rev., vol. 25, no. 1, pp. 1–12, 2020, doi: 10.1016/j.apmrv.2019.04.001.
[22] A. Goss and G. S. Roberts, “The impact of corporate social responsibility on the cost of bank loans,” J. Bank. Financ., vol. 35, no. 7, pp. 1794–1810, 2011, doi: 10.1016/j.jbankfin.2010.12.002.
[23] J. Huang, Z. Duan, and G. Zhu, “Does Corporate Social Responsibility Affect the Cost of Bank Loans? Evidence from China,” Emerg. Mark. Financ. Trade, vol. 53, no. 7, pp. 1589–1602, 2017, doi: 10.1080/1540496X.2016.1179184.
[24] B. L. Connelly, S. T. Certo, R. D. Ireland, and C. R. Reutzel, “Signaling theory: A review and assessment,” J. Manage., vol. 37, no. 1, pp. 39–67, 2011, doi: 10.1177/0149206310388419.
[25] F. La Rosa, G. Liberatore, F. Mazzi, and S. Terzani, “The impact of corporate social performance on the cost of debt and access to debt financing for listed European non-financial firms,” Eur. Manag. J., vol. 36, no. 4, pp. 519–529, 2018, doi: 10.1016/j.emj.2017.09.007.
[26] I. Ghozali, “Aplikasi Analisis Multivariete IBM SPSS 23,” Badan Penerbit Univ. Diponegoro, Semarang, 2016.
[27] D. A. H. Ahmed, Y. Eliwa, and D. M. Power, “The impact of corporate social and environmental practices on the cost of equity capital: UK evidence,” Int. J. Account. Inf. Manag., vol. 27, no. 3, pp. 425–441, 2019, doi: 10.1108/IJAIM-11-2017-0141.
[28] S. Antonio, P. Felice, and G. Anastasia, “Does sustainability foster the cost of equity reduction? The relationship between corporate social responsibility (CSR) and riskiness worldwide,” African J. Bus. Manag., vol. 12, no. 12, pp. 381–395, 2018, doi: 10.5897/ajbm2018.8562.
[29] M. L. Matthiesen and A. J. Salzmann, “Corporate social responsibility and firms’ cost of equity: How does culture matter?,” Cross Cult. Strateg. Manag., vol. 24, no. 1, pp. 105–124, 2017, doi: 10.1108/CCSM-11-2015-0169.
[30] M. Federica, I. Barbara, and S. Magnanelli, “Corporate Social Responbility and Cost of Debt: The Relationship,” Soc. Responsib. J., vol. 13, no. 2, pp. 53–62, 2017.
[31] A. Hamrouni, A. Uyar, and R. Boussaada, “Are corporate social responsibility disclosures relevant for lenders? Empirical evidence from France,” Manag. Decis., vol. 58, no. 2, pp. 267–279, 2019, doi: 10.1108/MD-06-2019-0757.