American Journal of Humanities and Social Sciences Research (AJHSSR) 2020 AJHSSR Journal Page | 72 American Journal of Humanities and Social Sciences Research (AJHSSR) e-ISSN :2378-703X Volume-4, Issue-1, pp-72-80 www.ajhssr.com Research Paper Open Access The Effect of Environmental Performance on Company Value with Environmental Disclosure as a Mediating Variable I Made Darmayoga 1 , I G. A. M. AsriDwija Putri 2 , A. A. G. P. Widanaputra 3 , I GdeAry Wirajaya 4 , I Putu Budiarta 5 1,2,3,4 Faculty of Economics and Business, Udayana University (Unud), Bali, Indonesia 5 Department of Tourism, PoliteknikNegeri Bali, Indonesia ABSTRACT : This study aims to obtain empirical evidence regarding the effect of environmental performance on company value with environmental disclosure as a mediating variable. This research was conducted at companies belonging to the mining sector in the Indonesia Stock Exchange in 2014-2018. The method of determining the sample used is using purposive sampling with the criteria of companies that publish annual reports and follow PROPER for consecutive 2014-2018 so that 35 observations are obtained. The data analysis technique used is path analysis. Based on the results of the study, it is known that the environmental performance proxied by PROPER has a positive effect on environmental disclosure. Environmental performance has a positive effect on company value. Environmental disclosure that is proxied by the GRI index has a positive effect on company value. Environmental disclosure is able to mediate the effect of environmental performance on company value. KEYWORDS: environmental performance, environmental disclosure, company value I.INTRODUCTION The mining industry is an industry that is often accused of having the worst environmental performance. It can be seen from many cases of environmental damage caused by the mining industry. Miranti (2015) stated that development of this industry requires a large source of energy and it is a significant source of income for the country. In 2015, the mining sector stock index began to weaken comparing with other sectors and was a deterrent to the rise of the composite stock price index. Based on statistics from the Indonesia Stock Exchange, in 2015 the mining sector index fell to 37% compared with the previous year. The same thing also happened in the next two years that the mining sector stock index fell again to 4.45% in 2017. The weakening of the mining sector stock index is followed by increasing environmental damage. It is about 70 percent of the environmental damage in Indonesia is caused by mining operations. It is nearly 34 percent of Indonesia's land has been handed over to corporations through mining permits. Coastal and marine areas are also exploited, it is more than 16 reclamation points, sand mining, iron sand mining, and being a dump site for Newmont and Freeport tailings. Furthermore, at least 3.97 million hectares of protected forest, are threatened by exploitation and mining activities (Rizkan et al., 2017). Both of these phenomena indicate that negative perceptions of public to the mining sector share havebegan to grow and have an impact. The public is increasingly critical and sees industrial and mining activities as the main contributors to environmental problems. At present the public demands that the environmental damage resulting from industrial activities must be the responsibility of the industry itself and maintenance of the environment should be considered more. Relating with the existence of companies in Indonesia, many parties expect that companies in Indonesia and even throughout the world must start to develop sustainable and environmentally friendly businesses, because if this is ignored then in 2040-2050 natural damage will be more serious. So accounting also plays a role in environmental preservation efforts, namely through voluntary disclosure in annual reports relating with environmental performance. The accounting system which has accounts related to performance and disclosure is referred to environmental accounting.