Green Earth: Carbon Emissions, ISO 14001, Governance Structures, Militarily Connected from the Manufacturing Industries in Indonesia

Abstract

Research aims: This study aims to examine the effect of ISO 14001 empirically, Governance Structures and companies led by back with a military to carbon emissions disclosure in the manufacturing company that registered at the (IDX) Indonesian Stock Exchange of 2013 to 2017. Design/Methodology/Approach: The sample in this research was 53 companies chosen based on purposive sampling technique. The data used was 265 observation. The testing of hypotheses uses Ordinary Least Square (OLS) regression with STATA v14. Research findings:The research results show that there are three variables have proven to be not significant to carbon emissions, namely board independent, military connection, and return of equity. Research proves that board independent, military relationship, and return of equity did not affect commitment to express carbon emissions. On the other hand, this research demonstrates that there is four a variable that has significant impact on the carbon emission disclosure in manufacturing company that is, board size, ISO 14001, firms size and leverage. Theoretical contribution/ Originality: This research explain that the average Carbon Emission Disclosure (CED) performance of companies that have militaryconnected is higher than companies that not military-connected. Companies that have an ISO 14001 certificate with military connections have a higher average and are significantly higher than companies that are not connected with the military. Practitioner/Policy implication: The results of this study indicate the importance for companies to pay attention to the environment of production activities and the need for the government to set standards for disclosure of carbon emissions in order to achieve clean. Research limitation/Implication: The research carried out is still limited to companies that publish carbon emissions disclosures, inconsistent and still relatively low because disclosure of carbon emissions is still voluntary.

The Role of Environmental Management System, Environmental Performance, and Military Connections to Carbon Emission Disclosure

“…Harymawan's (2018) research conducted in Indonesia found that companies that have leaders with a military background have the power to get low-interest rates and have low debt. The results of this study are in line with Iswati and Setiawan, (2020) stated that military connections have no influence on the disclosure of carbon emissions.…”

“…This can be due to several factors, one of which is to make voluntary reporting requires considerable costs and a long time to be made which aims to be used by stakeholders in analyzing and making decisions. In line with the research of Yunus et al, (2016); Iswati and Setiawan (2020).…”

“…Hopes for companies led by former service members are still studying how to increase voluntary disclosures of carbon emissions. They do not prioritize voluntary disclosure over mandatory disclosure and the skills they have that effective communication with subordinates has not been able to run in the same direction as voluntary disclosure (Iswati and Setiawan, 2020). Because in this structure, former members of the military have different goals and ways to improve the company's performance.…”

Do Environmental Issues Matter to Investors?

“…According to Supatminingsih (2015), ISO 14001 certified companies are committed to continuous and sustainable improvement. The implementation of ISO 14001 also represents a good environmental management system, where the company is committed to monitoring, managing, controlling, and reporting related to operational activities related to environmental aspects (Iswati & Setiawan, 2020).…”

Perkembangan Penelitian Carbon Disclosure di Indonesia

“…, (Monica dkk, 2021) Accounting Analysis Journal AAJ (Akhiroh & Kiswanto, 2016), (Krisnawanto & Solikhah, 2020), (Hapsari & Prasetyo, 2020) Journal of Accounting and Investment JoAI (Hapsoro & Falih, 2020), (Iswati & Setiawan, 2020) Indonesian Journal of Sustainability Accounting and Management IJSAM (Setiawan & Iswati, 2019), (Daromes dkk, 2020), (Evana dkk, 2021) The…”