Accounting

Determinant Factors of Carbon Emission Disclosure in Indonesia

Currently, environmental issues are being discussed in various countries, including Indonesia. Erratic climate change greatly affects global warming around the world, one of them is related to carbon emissions disclosures (CED). However, there are still inconclusive findings in factors that determine the extent of CED. Based on comprehensive research, the objective of this paper to examine some selected factors in their relations to the extent of CED. Then, green strategy, corporate social responsibility disclosure, good corporate governance, board of director, institutional ownership, and financial performance were analyzed to seek their significant relationships to the extent of CED. This study used a modified CED measurement from previous studies and CSRD measurement using a combined CSR Matrix from three countries. Corporate annual reports of the consumer goods industry for the year 2015 to 2019 were examined to verify the CED practices by applying a content analysis method and multiple regression analysis with quantitative approach.

From our empirical investigations, some  interesting results emerge. First, our results indicate that green strategy, corporate social responsibility disclosure and good corporate governance has a significant positive effect on disclosure of carbon emissions. Second, for control variables only return on asset affects on carbon emissions disclosure. This indicates that although the average total assets used for the company’s operational activities is low, it can still generate profits and motivate better disclosure of carbon emissions. Meanwhile, other control variables, namely the board of directors and institutional ownership, do not have influence on carbon emission disclosure because their main focus is still on the financial aspect.

The implications of this research can be used as a basis for developing a more innovative strategy so that it can serve as a guideline for internal company regulations and public regulations. This research is also useful for managerial parties and investors to consider environmentally friendly products that are supported by good corporate governance.

Source:

  • Andrian, T. & Kevin. (2021). Determinant Factors of Carbon Emission Disclosure in Indonesia. Journal of Southwest Jiaotong University. 56(1), 345-357.
  • Google Image. (2021)
Tommy Andrian, S.E., M.Ak, Cert.DA.