Abstract
This research examines how profitability, company size, board independence, and board gender diversity affect carbon emission disclosures in Indonesian companies. The sample of this study consists of 36 manufacturing companies which were consecutively listed on Indonesian Stock Exchange from 2015 to 2018. The carbon emission disclosures were measured using a disclosure checklist consisting of 18 items. Using multiple regression analysis, this study found that carbon emission disclosures are greater in more profitable and larger companies. This suggests that financial resources availability and the political visibility can increase carbon emission disclosures. This study also finds that carbon emission disclosures are greater in companies with a large portion of independent commissioners and female directors. This supports the legitimacy and stakeholder theories that a more independent and diversified board will be more able to manage different stakeholder expectations. The findings can provide evidence to companies about how to increase their carbon emission disclosures, which can consequently help the government to control the national carbon emissions.
Highlights
The rapid economic growth does bring positive impact to the standard of living of the people, and harm the natural resources and increase carbon emissions (Mardani et al, 2019; Trufvisa and Ardiyanto, 2019)
This study aims to provide evidence on how profitability, company size, board independence, and board gender diversity affect the carbon emission disclosure made by manufacturing companies listed on Indonesian Stock Exchange for the period of 2015 to 2018
We found that profitability has a positive relation to carbon emission disclosures which is significant at 99% confidence level
Summary
The rapid economic growth does bring positive impact to the standard of living of the people, and harm the natural resources and increase carbon emissions (Mardani et al, 2019; Trufvisa and Ardiyanto, 2019). The government of Indonesia has started an initiative called the National Action Plan on Greenhouse Gases Emission or RAN-GRK. This initiative targeted a reduction of the Greenhouse Gases (GHG) emission as much as 26% with national effort or 41% with international support by 2020. Indonesia further set the reduction target of 29% by 2030 under the Intended Nationally Determined Contribution (INDC) (Putranti and Imansyah, 2017). To achieve those targets, an integrated effort from the society and corporations are necessary. The corporations’ role can be done through carbon accounting and carbon emission disclosure (Irwhantoko and Basuki, 2016)
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