Abstract
The purpose of this study is to evaluate the effect of profitability, leverage, and company size on environmental disclosure with the proportion of independent directors as moderator. A maximum of 61 agricultural and mining sector companies listed on the Indonesia Stock Exchange in 2014-2018 was the population of this report. The sampling method used purposing sampling, so with 45 units of analysis, we get 9 sample companies. The quantitative method used regression analysis for balance. The results show that profitability does not influence on environmental disclosure. Leverage has a negative effect on environmental disclosure. Company size has a positive effect on environmental disclosure. The proportion of independent directors is able to moderate the effect of profitability on environmental disclosure but is not able to moderate the effect of leverage and company size on environmental disclosure. This study concludes that leverage has a negative relationship with environmental disclosure and firm size has a positive relationship with environmental disclosure and the proportion of independent commissioners moderates the relationship between profitability and environmental disclosure. The findings show the important role of independent commissioners in environmental disclosure, namely providing investors with a balance and maintaining an unbiased and impartial atmosphere.
Highlights
Concerns for environmental quality and protection of human health have caused companies or organizations to pay more attention to the environmental impacts caused by the activities they undertake
Company size has a positive effect on environmental disclosure as evidenced by Ijma & Yusnita (2018), Burgwal & Vieira (2014) as well as
H3: Company size has a positive effect on environmental disclosure
Summary
Concerns for environmental quality and protection of human health have caused companies or organizations to pay more attention to the environmental impacts caused by the activities they undertake. The higher demands of society cause some companies, especially those which activities are related to the environment make policies that concern corporate accountability to stakeholders, especially in the environmental field. The increasingly widespread environmental problems motivate various parties both international and national to overcome these problems. This is shown by the emergence of environmental care organizations both on a national scale such as the Indonesian Forum for the Environment or WALHI and in the international scope such as Greenpeace and IUCN (International Union for Conservation of Nature).
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