Impact of eco-efficiency on firm value: Evidence from manufacturing companies listed in Indonesia Sharia Stock Index

The activity of manufacturing sector has been contributing to the climate change issues. The stakeholders must actively participate in addressing the issues as it is their responsibility as human beings. This research thesis will investigate the influence of eco-efficiency on firm value. The study will aim to observe the direct effect of implementing the eco-efficiency against the firm value of the manufacturing companies listed in Indonesia sharia stock index from 2013 to 2022. The study will utilise moderated regression analysis, with leverage and profitability as the moderating variables, age as the novel aspect of this research. The results indicate that there is a negative impact of eco-efficiency on firm value. Additionally, the leverage can enhance the relationship between eco-efficiency and firm value, while profitability can weaken this relationship. The implication of this study suggests that the company's stakeholders should reassess the implementation strategy of eco-efficiency in order to enhance its effectiveness of efficiency. This is particularly important considering the presence of an evaluation process in the implementation of ISO 14001. Furthermore, it is imperative for the government to strictly enforce sustainable business policies, particularly for the most environmentally polluting company in Indonesia.