Do Environmental Accounting and the Performance of the Banks Contribute to the Value of the Islamic Banks?

Published: 7 May 2024| Version 1 | DOI: 10.17632/c458r5nng8.1
Agus Dwianto,


Purpose: This research aims to explore the factors influencing the sustainable enhancement of Islamic banking value, focusing on Islamic bank performance as a mediator and environmental disclosure as a moderator. It seeks to provide insights into sustainable financial practices aligned with Islamic Shariah values. Design/Methodology/Approach: The study employs a quantitative approach using Partial Least Squares Structural Equation Modeling (PLS-SEM) to analyze data collected from three Islamic commercial banks listed on the Indonesia Stock Exchange over a four-year period (2019-2022). The research investigates the relationships between Islamic intellectual capital (IIC), Islamic corporate governance (ICG), Islamic Maqashid Index (IMI), Islamic bank performance (PIB), environmental disclosure (ED), and the value of Islamic banks (VIB). Findings: The results indicate that Islamic intellectual capital and Islamic corporate governance have a negative impact on Islamic bank performance. Furthermore, Islamic Maqashid Index does not significantly influence the value of Islamic banks. However, Islamic bank performance positively affects the value of Islamic banks. Additionally, environmental disclosure moderates the relationship between Islamic bank performance and the value of Islamic banks positively. Research Limitations/Implications: The study is limited to a specific sample of Islamic commercial banks in Indonesia and a four-year period. Future research could expand the sample size and duration to enhance the generalizability of the findings. Additionally, qualitative research methods could provide deeper insights into stakeholders' perspectives on environmental disclosure and its impact on Islamic banking value. Practical Implications: The findings suggest that Islamic banks should focus on improving their performance to enhance their value. Moreover, incorporating environmental responsibility into their operations can further bolster their legitimacy and stakeholder trust, ultimately contributing to sustainable financial practices. Originality/Value: This research contributes to the literature by examining the complex relationships between Islamic intellectual capital, corporate governance, Maqashid Sharia, bank performance, environmental disclosure, and bank value in the context of Islamic banking. It sheds light on sustainable financial practices aligned with Islamic values and provides practical insights for stakeholders in the Islamic banking industry. Keyword; Islamic intellectual capital; corporate governance; Maqashid Sharia; Bank performance; Environmental disclosure; bank value company. JEL Classification: Q51 Z13 G32 G2



Universitas Muhammadiyah Surakarta


Research Article