The Effect of Greenwashing Practices on Corporate Financial Performance: The Moderating Role of ESG Performance

Dinda Rahmahani Aisyah; Diana Tien Irafahmi; Sri Pujiningsih

doi:10.59890/ijma.v4i1.222

Authors

Dinda Rahmahani Aisyah Universitas Negeri Malang
Diana Tien Irafahmi Universitas Negeri Malang
Sri Pujiningsih Universitas Negeri Malang

DOI:

https://doi.org/10.59890/ijma.v4i1.222

Keywords:

Greenwashing, Financial Performance, PROPER, Legitimacy Theory

Abstract

This study investigates the effect of greenwashing on corporate financial performance with ESG performance as a moderating variable and market capitalization as a control variable. The study uses 40 mining, energy, and basic materials companies listed on the Indonesia Stock Exchange during 2021–2024. The results reveal that greenwashing negatively but insignificantly affects financial performance, while ESG significantly moderates this effect. The Conclusion is Greenwashing negatively but insignificantly influences financial performance, while ESG performance significantly weakens this negative effect. Firms with stronger ESG implementation are better positioned to maintain legitimacy. Market capitalization positively affects financial performance.

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