Exploration of research and development, foreign ownership, and carbon emissions disclosure in Indonesia

Abstract

Carbon emission disclosure (CED) is one of the corporate world's efforts to assist environmental conservation while also improving the company's public image. Efforts are being made to make firm operations greener by optimizing research and development (R&D), which leads to environmental improvements. Several prior studies investigated research and development on corporate social responsibility in general. The purpose of this study is to investigate the the impacts of R&D and foreign ownership on carbon emissions disclosure in Indonesian companies. This research also examines proactive steps done by firms to significantly reduce emissions through green research and development and supported by large foreign share ownership, which is regarded to be involved with high concern. The empirical analysis applies multiple regression and moderated regression, with purposive sampling on the Indonesia Stock Exchange (BEI) company between 2016 and 2019, obtained 522 samples. Carbon emissions disclosure is measured using a checklist index based on the Carbon Disclosure Project (CDP) and content analysis of the company's sustainability report. Based on the findings, RnD intensity has a positive impact on carbon emissions disclosure (CED), however foreign ownership in Indonesia has no effect on the relationship between RnD intensity and CED. This suggests that R&D will enhance the amount of carbon emissions disclosure, yet foreign ownership in Indonesia remained minimal, hence it has minimal effect on the company's long-term decisions. Research has limitations in recognizing RnD that implemented proactive approaches, so further studies on each company are required for future research.