DO GREEN PRACTICES PAY? GREEN ACCOUNTING, ENVIRONMENTAL PERFORMANCE, AND OPERATING PROFIT IN THE HALAL INDUSTRY

Abstrak

This study examines whether green accounting and environmental performance are associated with operating profit in Indonesia’s halal food and beverage firms listed on the Indonesia Sharia Stock Index during 2019–2024. Using a quantitative, associative design, we compile a firm-year panel of seven issuers and operationalize green accounting from environmental cost disclosures, while environmental performance is proxied by the national PROPER color rating. We estimate static panel regressions, select the preferred specification via standard model tests, and employ robust inference. The results show that green accounting has a clear and positive association with operating profit, consistent with stakeholder theory, embedding environmental cost information in managerial decisions and transparent reporting reduces information asymmetry, strengthens stakeholder trust, and can translate into efficiency gains and revenue growth. By contrast, environmental performance, measured at the compliance level, does not exhibit a meaningful effect on operating profit in this sample, suggesting that meeting minimum regulatory requirements alone is insufficient to generate short-run profit advantages. Diagnostic checks support the reliability of the estimates, and sensitivity analyses uphold the main findings. The study contributes sector-specific evidence from a halal context under an active environmental rating regime, offers a practical measurement of green accounting that links cost categories to financial outcomes, and refines the stakeholder-theory argument by distinguishing internal accounting practices from compliance signaling. Implications include treating green accounting as a cost-management tool in budgeting and pricing, strengthening PROPER’s decision usefulness with intensity-based metrics, and expanding future research to capture lagged effects and higher beyond-compliance tiers.