The Influence of Green Investment and Corporate Social Responsibility on Company Financial Performance with Capital Structure as a Mediating Variable

Environmental sustainability has become increasingly critical in corporate strategy, driven by climate change concerns and evolving stakeholder expectations. This [A1] research [A2] aims to analyze the effect of Green Investment on improving corporate financial performance, examine the impact of Corporate Social Responsibility (CSR) practices on corporate financial performance, analyze the effect of capital structure on enhancing financial performance, assess the influence of Green Investment on a company's capital structure, investigate the impact of CSR practices on capital structure, evaluate the role of capital structure in mediating the relationship between Green Investment and financial performance, and analyze the mediating effect of capital structure on the relationship between CSR and financial performance. This research employs a quantitative approach. The research object consists of companies listed in the ESGS Kehati Index during the 2020–2024 period. The sample was selected using purposive sampling, resulting in 48 companies. The data used in this research are secondary data, collected through documentation of annual reports and sustainability reports. The data were analyzed using descriptive statistics, classical assumption tests, panel data model selection, t-tests, coefficient of determination, and the Sobel test. The results indicate that Green Investment does not have a significant effect on financial performance, while Corporate Social Responsibility has a significant positive effect on financial performance. Capital structure is proven to have a significant positive effect on financial performance and serves as a mediating variable in the relationship between Green Investment and financial performance. However, capital structure does not mediate the relationship between CSR and financial performance. The findings imply that strengthening an efficient capital structure is essential to enhance the effectiveness of Green Investment. Additionally, companies are encouraged to maintain and improve CSR practices as an integral part of their sustainable business strategy.