2025, Vol. 6, Issue 2, Part R

Background: Mining and energy companies have a significant environmental impact; therefore, green innovation and environmental cost management are strategic factors that can influence market perception and company value. Additionally, profitability can either strengthen or weaken the influence of these two factors, making it key vital to understand its moderating role in assessing the effectiveness of sustainable investments in enhancing company performance.

Purpose: This study aims to assess the influence of green innovation and environmental costs on firm value, as well as the role of profitability in moderating this relationship in mining and energy companies in Indonesia.

Design/Methodology/Approach: Moderation Regression Analysis (MRA) applied to time-series data from 2020 to 2024, focusing on twenty-one companies in the mining and energy sector listed on the Indonesia Stock Exchange (IDX). EViews 13 statistical software was used to process the secondary data.

Findings: This study found that green innovation has a significant effect on firm value (β = 0.189; p = 0.039), while environmental costs have insignificant effect (β = 0.028; p = 0.934). Furthermore, profitability can strengthen the influence of green innovation on firm value (β = 3.184; p = 0.002), but cannot moderate the relationship between environmental costs and firm value (β = -14.085; p = 0.285).