The Influence of Environmental Cost on Profitability and Firm Value

Environmental cost is a set of methods to measure the total environmental conservation cost.The purpose of this study is to examine the influence of environmental cost towards profitability measured by ROA, ROE, and NPM, and firm value measured by PER and Tobin's Q.The type of this research is explanatory with a quantitative approach.The object of this study is First Section Chemical Companies listed on the Japan Stock exchange in 2016-2018.The study uses 20 chemical companies with 60 samples of environmental accounting data from sustainability and annual report.The data analysis technique is a descriptive analysis and a simple regression.The results show that (1) environmental cost has a significant negative effect on return on asset, (2) environmental cost has a significant negative effect on return on equity, (3) environmental cost has a significant negative effect on net profit margin, (4) environmental cost has no significant effect towards price-earnings ratio, and (6) environmental cost has significant negative effect towards Tobin's Q.