The impact of sustainable human resource management on firm performance: evidence from Indonesian agriculture firms

As one of the major contributors to environmental degradation, the agricultural sector is expected to play an active role in addressing environmental challenges, including through the implementation of sustainable human resource management. This study aims to examine whether the adoption of sustainable human resource management has influenced firm performance which measured by ROA (Return on Assets). Using panel data regression analysis on 46 agricultural companies listed on the Indonesia Stock Exchange during the 2022–2024 period, the findings indicate that SHRM (Sustainability Human Resource Index) has a negative and statistically significant effect on firm performance. This result suggests that sustainability programmes are still relatively new in many firms, meaning that the investments made in sustainability initiatives have not yet generated positive financial returns. In the short term, these initiatives may increase operational costs, which can affect profitability. It also reveals an imbalance in SHRM implementation, where firms place greater emphasis on social sustainability initiatives, while environmental management and green profitability dimensions receive considerably less attention and disclosure. Based on these findings, the study recommends that firms continue to strengthen and support sustainability programmes by integrate sustainability objectives into performance appraisal systems, leadership development programmes, and strategic decision-making processes to promote a more balanced and comprehensive approach to SHRM particularly because most companies in the sample have already participated in initiatives aligned with the UN SDGs 2030.