The Impact of Green Intellectual Capital Disclosure and Environmental Performance on Financial Performance: The Moderating Role of Firm Size

Abstract

Introduction: Companies operating in the Consumer Non- Cyclicals sector are mainly engaged in manufacturing and shipping products. Having a continuous and high volume of consumption, their operational activities often cause great environmental pressure. Hence, the importance of environmental responsibility and the importance of intellectual resource management to improve financial performance in a sustainable business context.

Objectives: The study analyses how green intellectual capital (GIC) disclosure and environmental performance on financial performance. This study also analyses how firm size can moderate the connection between corporate environmental efforts and financial performance in Consumer Non-Cyclicals sector companies.

Methods: A quantitative methodology is adopted in this research, using previously published financial and sustainability reports. Panel data regression was employed as the method of analysis and Moderated Regression Analysis (MRA) to assess interaction effects. EViews 12 was used to perform statistical computations and hypothesis testing.

Results: Findings reveal that GIC disclosure does not significantly impact financial performance. In contrast, environmental performance and firm size has a significant positiveeffect on financial performance. Notably, the moderation analysis indicates that larger firms tend to weaken the positive association connecting sustainability performance to corporate earnings.

Conclusions: This finding show, from a total sample of 41 Consumer Non-Cyclicals firms on IDX (2021–2023), the results show that environmental performance and firm size positively influence financial performance, but GIC disclosure has no significant effect. Moreover, firm size weakens the connection involving environmental performance and financial performance. The explain the strategic role of the environment and show that the effectiveness of sustainability efforts varies by firm scale. The study addresses the importance of improving and standardizing the methods used to disclose GIC.