HERSUGONDO, Hersugondo (2026) " ARTIKEL Dr. HERSUGONDO, SE, MM: Corporate Sustainability and Good Corporate Governance Practices Impact On the Performance of Environmentally Based Public Companies in Indonesia ". QUALITY Access to Success, 27 (213).

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Abstract

This study investigates the impact of corporate sustainability and good corporate governance (GCG) practices on
the performance of environmentally-based public companies listed on Indonesia’s SRI KEHATI index. Using a
sample of 25 companies over 2020–2024 and employing Smart PLS4 for analysis, the study examines: (1) the
influence of corporate sustainability and GCG on capital structure; (2) their direct and indirect effects on firm
performance through capital structure as a mediating variable; and (3) the direct effect of capital structure on firm
performance. Corporate sustainability is measured via Global Reporting Initiative (GRI) compliance, while GCG is
proxied by the proportion of independent commissioners.Findings reveal that both corporate sustainability and GCG
have significant positive effects on capital structure, suggesting that higher sustainability and governance standards
enable more effective and transparent financial decision-making. However, corporate sustainability alone does not
significantly affect firm performance. Notably, both corporate sustainability and GCG, when mediated by capital
structure, exhibit significant negative effects on firm performance—indicating that an increased focus on capital
structure may inversely impact performance. Directly, GCG positively affects firm performance, while capital
structure itself negatively influences performance, highlighting the risk associated with high debt levels. These
results underscore the complexity of balancing sustainability, governance, and financial structure to optimize
performance in environmentally conscious firms. The study contributes to the ongoing debate on the effectiveness
of sustainability and governance initiatives in enhancing firm value, especially within emerging markets.

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