The Influence of Energy Consumption on Company’s Carbon Emissions; Is GCG Capable of Reducing The Carbon Emissions, Research on State-Owned Enterprises in Indonesia

Abstract

The escalating global temperature resulting from climate change demands urgent attention. Carbon gas pollution, a leading contributor to climate change, induces a greenhouse gas effect. This study aims to assess the influence of Energy Consumption on Carbon Emissions generated by companies. Additionally, it explores the relationships between Carbon Emissions and other variables, including Good Corporate Governance (GCG) practices, Profitability, Size, and Debt Ratios of companies, utilizing an analytical framework model for regression analysis. The research relies on data extracted from annual and sustainability reports of 31 State-Owned Enterprises (BUMN) in Indonesia spanning the years 2018 to 2022. The findings underscore that GCG Practices, Debt Ratios, Size, and Energy Consumption exert a direct impact on environmental performance. In contrast, Profitability does not demonstrate a direct influence on the magnitude of Carbon Emissions produced. The empirical evidence indicates uncertainty in the results when compared with other studies examining factors influencing company performance.