Abstract
<p><em>This study aims to determine the effect of executive compensation on firm value through greenhouse gas emissions disclosure as a mediation variable. Population in this research are firms listed in the Indonesia Stock Exchange (IDX) and published sustainability reports for the period 2015 to 2019. The sample determination in this study used a purposive sampling method and obtained 150 companies. The data analysis technique in this research is using Partial Least Square (PLS) test. </em><em>This study shows that executive compensation has a significant positive effect on firm value but does not affect greenhouse gas emissions disclosure. Greenhouse gas emissions disclosure has no significant effect on firm value. </em><em>This research contributes to the relationship of literature about the greenhouse gas emissions being able to mediate partially the effect of executive compensation on firm value. Furthermore, it also addresses greenhouse gas emission and executive compensation using company samples and periods that have not been explored previously.</em></p>
Highlights
Climate change is a global problem that has significant impacts on economic, social and environmental aspects of life
This study aims to determine whether the variable disclosure of greenhouse gas emissions is able to mediate the effect of executive compensation on firm value
Initiative (GRI) and annual reports of companies listed on the Indonesia Stock Exchange (BEI) for the 2015-2019 period
Summary
Climate change is a global problem that has significant impacts on economic, social and environmental aspects of life. Greenhouse gas emissions are proven to be a major cause of global climate change (Depoers, Jeanjean, & Jérôme, 2016). Human activity is a major cause of increased greenhouse gas emissions that cause climate change (Lai, 2014; Luo, Lan, & Tang, 2012). In 2018 in Indonesia there was one of the environmental phenomena associated with greenhouse gas emissions, namely forest fire events. This prompted the Government of Indonesia to issue legal and regulatory tools, namely the National Action Plan on Reducing Home Gas Emissions as outlined in Peraturan Presiden No 61/2011 and Invetarisasi GRK through Peraturan Presiden No 71/2011. The Indonesian government has committed to voluntarily reduce greenhouse gas emissions by 26% by its own efforts and 41% with international support until 2020
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