The Impact of Green Management on Investor Confidence, Mediated by Good Corporate Governance in the Raw Materials Sector

Abstract

Specifically in the raw materials industry, which has a significant environmental impact, this study examines shifts in investor perceptions of sustainability practices and the role of corporate governance in tracking business success and investor investment choices. However, findings vary regarding how effective green management is in enhancing investor confidence. This study uses good corporate governance as a mediating variable to investigate how green management influences investor confidence. This study employs a quantitative approach, utilizing structural equation modeling based on partial least squares (SEM-PLS) to analyze secondary data from sixteen companies for the years 2021–2024. The findings indicate that while green management impacts good corporate governance, it does not have a significant effect on investor confidence. Furthermore, the study shows that investor confidence is positively influenced by excellent corporate governance; however, there is little evidence of a mediating effect between green management and investor confidence. Corporate governance plays a more dominant role than environmental practices in shaping investor confidence, so companies need to enhance the credibility and transparency of their sustainability information.