Effect of Carbon Performance, Company Characteristics and Environmental Performance on Carbon Emission Disclosure: Evidence From Indonesia

Abstract

This study aims to examine and obtain empirical evidence of the factors that influence the disclosure of carbon emissions in public listed companies in Indonesia. The factors tested include carbon performance, firm size, profitability, leverage, capital expenditure, the level of asymmetry of company information and environmental performance. The population in this study are companies listed on the Indonesia Stock Exchange. The sample selection method uses a purposive sampling method, namely sampling based on criteria: publishing annual reports and sustainability reports in 2013-2017 and disclosing carbon emissions explicitly. The final sample in this study were 9 companies. The results showed that company size and capital expenditure had a positive and significant effect on carbon emission disclosure. Meanwhile, profitability and leverage have a negative and significant effect. The results also showed that carbon performance, the level of information asymmetry and environmental performance did not significantly influence the disclosure of carbon emissions.

Can Environmental Performance Improve Disclosure of Carbon Emissions in Mining Companies in Indonesia?

“…So this condition can give confidence to creditors that their loan funds are safe and can be returned. This finding aligns with Ratmono et al [23] and Leung and Philomena [24].…”

“…So that from this operation, the company can pay off debt and interest compared to managing carbon emissions and making disclosures that also cost money. Ratmono et al [23] and Leung and Philomena [24] state that high leverage will reduce the disclosure of carbon emissions.…”

The Effect of Environmental Performance, Company Characteristics and Media Exposure on Environmental Disclosures (Study of Manufacturing Companies listed on the Indonesia Stock Exchange for the Period 2010-2021)

“…This study also shows a positive influence between company size (SIZE) and environmental disclosure, following the legitimacy theory that large companies have extensive resources and carry out many activities that impact society and the environment. The result is that the pressure received by companies will be even greater because companies must make objective and quality voluntary disclosures to gain legitimacy or recognition (Ratmono, 2019). The results of this study are in line with Akhter et al (2022) and Siregar&Deswanto (2018) but not in line with Maulana et al (2021) and Terry &Asrori (2021).…”

“…The company makes this disclosure to gain legitimacy from the social community groups where the company is located and seeks to maximize the company's long-term strength in the financial aspect (Irwhantoko& Basuki, 2016). The theory of legitimacy is the basis of the company in maintaining the company's values and good image from unwanted things, such as differences in value views from outsiders or legitimation gaps (Ratmono, 2019). So that one way to avoid or reduce this is to make a complete disclosure of the company's environment.…”

“…Based on the purposive sampling technique, a sample of 25 companies was obtained that were worthy of being used as research objects, with a total of 125 samples during 2010, 2013, 2016, 2019 and 2021 research periods. (2010-2019), Asia Pacific (2010 and several other companies that are not reported on the Kompas.com website. From the data above, an average value of 11.0400 is also obtained with a standard deviation of 28.81403.…”