Indonesia’s basic materials sector sits at a confluence of economic ambition and environmental accountability. Against the backdrop of post-pandemic recovery and accelerating sustainability reform, this paper asks whether corporate governance quality, voluntary environmental disclosure, and capital structure choices translate into measurable differences in firm profitability. Drawing on secondary data from annual and sustainability reports, we construct a balanced panel of 78 companies listed on the Indonesia Stock Exchange (IDX) across 2022–2024, yielding 190 firm-year observations after removing 44 outliers through SPSS Explore diagnostics. Multiple linear regression, preceded by rigorous classical assumption testing, is employed with Return on Assets (ROA) as the performance metric and firm size and age as controls. The results reveal a statistically significant and economically meaningful positive effect of Environmental Disclosure on ROA (β = 0.014, t = 2.868, p = 0.005), lending support to legitimacy theory: firms that institutionalize ecological transparency reduce information asymmetry, cultivate investor trust, and ultimately harvest profitability returns. Good Corporate Governance and Capital Structure (Debt-to-Equity Ratio) do not exert individually significant effects, yet the three predictors collectively explain a significant share of performance variation (F = 3.691, p = 0.013, Adj. R² = 0.041). These findings carry direct implications for boards, regulators, and investors navigating Indonesia’s evolving ESG landscape.
Winata et al. (Wed,) studied this question.