Carbon emission disclosure in the agriculture industry in Indonesia: The determinant factors

Abstract

The agriculture industry in Indonesia, despite its huge contribution to the country’s economy, is responsible for a substantial amount of carbon emissions. Hence, according to the country’s stock exchange regulation, agriculturally listed companies shall annually report their carbon emissions and carbon emission mitigation. The main objective of our research is to analyze the factors that influence the reporting of greenhouse gas emissions by agriculture corporations. The examined factors are environmental performance, which is assessed through environmental performance ratings and environmental management certification, the released sustainability report, ownership structure, and financial characteristics. Using 91 publicly traded agriculture companies from 2019 to 2022 as a sample, the ordinally least squares regression analysis shows that publications of a company’s carbon emissions tend to rise in accordance with both the rating of its environmental performance and the issuance of its sustainability report. Institutional ownership and financial characteristics of a company do not have any relationship with the extent of carbon emission disclosures. This study delivers an understanding to the Financial Service Authority Agency that the environmental performance rating assessment by the KLH and the yearly sustainability report encourage companies to do activities related to environmental sustainability.