Optimizing Environmental Performance Through Corporate Governance Mediated by The Sustainability Balanced Scorecard in Indonesia’s Energy Sector

0e909e8e-024b-4896-9b64-dceebc270e9420251008095922750wseas:wseasmdt@crossref.orgMDT DepositFinancial Engineering2945-114010.37394/232032https://wseas.com/journals/fe/11020251102025310.37394/232032.2025.3https://wseas.com/journals/fe/2025.phpOptimizing Environmental Performance Through Corporate Governance Mediated by The Sustainability Balanced Scorecard in Indonesia’s Energy SectorAndiIrfanDepartment of Accounting Diploma III Faculty of Economic and Social Science UIN Sultan Syarif Kasim Riau, H.R. Soebrantas 155, 28293 INDONESIAAdindaUtariDepartment of Accounting Faculty of Economic and Social Science UIN Sultan Syarif Kasim Riau, H.R. Soebrantas 155, 28293 INDONESIAAinunMardiahDepartment of Management Faculty of Economic and Social Science UIN Sultan Syarif Kasim Riau, H.R. Soebrantas 155, 28293 INDONESIAThis study examines the relationship between good corporate governance, sustainability balanced scorecard, and environmental performance in Indonesian energy sector companies, investigating whether sustainability reporting mediates the governance-performance relationship. Methodology using panel data regression with random effects model. This study analyzes 35 energy companies listed on the Indonesia Stock Exchange during 2021-2023, yielding 105 firm-year observations. Good corporate governance is measured by independent commissioner proportions, sustainability balanced scorecard using RDAP model criteria, and environmental performance through PROPER certification rankings. The analysis employs systematic model selection procedures and comprehensive diagnostic testing. Findings, only one of four hypotheses is supported. Good corporate governance significantly influences sustainability balanced scorecard implementation (β = 0.006, p = 0.018), supporting agency theory predictions. However, good corporate governance does not directly affect environmental performance (p = 0.748), sustainability balanced scorecard fails to enhance environmental performance (p = 0.692), and no mediation effect exists (p = 0.347). The results reveal a decoupling between sustainability reporting practices and actual environmental outcomes.1082025108202543444237https://wseas.com/journals/fe/2025/a74fe-027(2025).pdf10.37394/232032.2025.3.37https://wseas.com/journals/fe/2025/a74fe-027(2025).pdf10.3390/su8090866M.-C. Yu, C.-N. Wang, N.-N.-Y. Ho, and M. A. Rosen, “A Grey Forecasting Approach for the Sustainability Performance of Logistics Companies,” 2016, doi: 10.3390/su8090866. 10.25105/jipak.v17i1.8664D. R. Safitri and T. D. 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