The Determinants of Environmental Disclosure Quality: Empirical Evidence from Indonesia
Abstract
Sustainability issues have increased the need for stakeholder toward environmental information disclosure. Quality of environmental information is pivotal for stakeholders to make a proper assessment of a firm’s environmental performance. This study examines the relationship between a firm’s characteristics and environmental disclosure quality. Firm’s characteristics in this study refer to the size, ownership concentration, age, and leverage. Content analysis of sustainability reporting was applied in this study. The study involved 33 listed firms in Indonesia Stock Exchange (IDX) that are consistently issued sustainability reporting during 2014-2016. Simultaneously test indicated that characteristics of the firm significantly explain the variance of environmental disclosure quality. However, partially test showed that leverage is the only variable significantly influenced environmental disclosure quality.
Keywords
Full Text:
PDFReferences
Akbas, H. E. (2014). Company Characteristics and Environmental Disclosure: An Empirical Investigation on Companies Listed on Borsa Istanbul 100 Index. The Journal of Accounting and Finance, April.
Akrout, M. M., & Othman, H. Ben. (2016). Ownership Structure and Environmental Disclosure in Mena Emerging Countries. Corporate Ownership and Control, 13(4), 381–388. https://doi.org/10.22495/cocv13i4c2p9
Alamgir, M., & Uddin, M. N. (2017). The Mediating Role of Corporate Image on the Relationship between Corporate Social Responsibility and Firm Performance: An Empirical Study. International Journal of Business and Development Studies, 9(1), 91–111.
Albertini, E. (2014). A Descriptive Analysis of Environmental Disclosure: A Longitudinal Study of French Companies. Journal of Business Ethics, 121, 233–254. https://doi.org/10.1007/s10551-013-1698-y
Alsaeed, K. (2006). The association between firm-specific characteristics and disclosure: The case of Saudi Arabia. Managerial Auditing Journal, 21(5), 476–496. https://doi.org/10.1108/02686900610667256
Ane, P. (2012). An Assessment of the Quality of Environmental Information Disclosure of Corporation in China. Systems Engineering Procedia, 5, 420–426. https://doi.org/10.1016/j.sepro.2012.04.064
Braga, C., Silva, P. P. da, & Santos, A. (2015). Level of Disclosure of Environmental Information in the Electricity Sector: An Empirical Study of Brazil and the Iberian Peninsula. Global Journal of Management and Business Research, 15(9).
Dasgupta, S., Laplante, B., & Mamingi, N. (1998). Capital market responses to environmental performance in developing countries. In Policy Research Working Paper (No. 1909; Policy Research Working Paper). https://doi.org/10.1016/j.jdeveco.2009.06.005
Deegan, C. (2002). Introduction: The legitimising effect of social and environmental disclosures – a theoretical foundation. Accounting, Auditing & Accountability Journal, 15(3), 282–311. https://doi.org/10.1108/09513570210435852
Diantimala, Y., & Amril, T. A. (2018). The Effect of Ownership Structure , Financial and Environmental Performances on Environmental Disclosure. Accounting Analysis Journal, 7(1), 70–77. https://doi.org/10.15294/aaj.v5i3.20019
Djajadikerta, H. G., & Trireksani, T. (2012). Corporate social and environmental disclosure by Indonesian listed companies on their corporate web sites. Journal of Applied Accounting Research, 13(1), 21–36. https://doi.org/10.1108/09675421211231899
Galani, D., Alexandridis, A., & Stavropoulos, A. (2011). The Association between the Firm Characteristics and Corporate Mandatory Disclosure the Case of Greece. World Academy of Science, Engineering and Technology, International Science Index 53, International Journal of Social, Behavioral, Educational, Economic, Business and Industrial Engineering, 5(5), 411–417.
Gantyowati, E., & Agustine, K. F. (2017). Firm’s Characteristics and CSR Disclosure, Indonesia and Malaysia Cases. Review of Integrative Business and Economics ResearchOnlineCDROM, 6(3), 131–145.
Ghazali, N. A. M. (2007). Ownership structure and corporate social responsibility disclosure: Some Malaysian evidence. Corporate Governance, 7(3), 251–266. https://doi.org/10.1108/14720700710756535
GRI. (2013). Sustainability reporting policies worldwide: today’s best practice, tomorrow’s trends. https://www.globalreporting.org/resourcelibrary/carrots-and-sticks.pdf
Gunawan, J. (2007). Corporate Social Disclosures by Indonesian Listed Companies: A Pilot Study. Social Responsibility Journal, 3(3), 26–34. https://doi.org/10.1108/09574090910954864
Hallgren, A., & Johansson, J. (2016). Determinants of Disclosure Quality. University of Gothenburg.
Ham, M., Horvat, M., & Mrčela, D. (2016). Insights for measuring environmental awareness. ECONVIEWS, 1, 159–176.
Handoyo, S. (2018). The Development of Indonesia Environmental Performance and Environmental Compliance. Journal of Accounting Auditing and Business, 1(1), 74–85. http://jurnal.unpad.ac.id/jaab/article/view/15656/7354
Hasseldine, J., Salama, A., & Toms, S. (2005). Quantity versus Quality: The Impact of Environmental Disclosures on the reputations of UK Plcs. British Accounting Review, 37(2), 231–248. https://doi.org/10.1117/12.479993
Hedberg and Malmborg. (2003). The GRI and corporate sustainability reporting in Swedish Companies. Corporate Social Responsibility and Environmental Management, 164, 153–164. https://doi.org/10.1002/csr.038
Huang, C. L., & Kung, F. H. (2010). Drivers of Environmental Disclosure and Stakeholder Expectation: Evidence from Taiwan. Journal of Business Ethics, 96(3), 435–451. https://doi.org/10.1007/s10551-010-0476-3
Limited Liability Company, (2007) (testimony of Indonesia Law No.40 of 2017). https://doi.org/10.1017/CBO9781107415324.004
Ismail, A. H., & Rahman, A. A. (2016). The quality of environmental disclosure in various reporting media of oil and gas companies in developing countries. Corporate Ownership and Control, 14(1), 203–218.
Kaium Masud, M. A., Bae, S. M., & Kim, J. D. (2010). Analysis of Environmental Accounting and Reporting Practices of Listed Banking Companies in Bangladesh. https://doi.org/10.3390/su9101717
Karthikeyani, J., & Angalakshmi, N. (2013). Corporate Sustainability Reporting in Emerging Economies-A Review and Future Direction. International Journal of Science and Research, 2(11), 252–256.
Kent, P., & Chan, C. (2009). Application of Stakeholder Theory to the Quantity and Quality of Australian Voluntary Corporate Environmental Disclosures. Corporate Ownership & Control, 7(1), 394–410. https://doi.org/10.2139/ssrn.447901
Lim, M. M. L., Søgaard Jørgensen, P., & Wyborn, C. A. (2018). Reframing the sustainable development goals to achieve sustainable development in the anthropocene—a systems approach. Ecology and Society, 23(3). https://doi.org/10.5751/ES-10182-230322
Loderer, C., & Waelchli, U. (2010). Protecting minority shareholders: Listed versus unlisted firms. Financial Management, 39(1), 33–57. https://doi.org/10.1111/j.1755-053X.2009.01065.x
Marco, M., Moneva, J. M., & Scarpellini, S. (2019). Environmental disclosure and Eco-innovation interrelation . The case of Spanish firms. Spanish Accounting Review, 22(1), 71–85.
Michelon, G., Pilonato, S., & Ricceri, F. (2015). CSR reporting practices and the quality of disclosure: An empirical analysis. Critical Perspectives on Accounting, 33, 59–78. https://doi.org/10.1016/j.cpa.2014.10.003
Mobus, J. L. (2005). Mandatory environmental disclosures in a legitimacy theory context. Accounting, Auditing and Accountability Journal, 18(4), 492–517. https://doi.org/10.1108/09513570510609333
Ngoc, L., & Hang, M. (2016). An Evaluation of Corporate Environmental Disclosures by Vietnamese Listed Firms. The Vietnam Economist Annual Meeting (VEAM) 2016.
Noordin, M. A., & Mohtar, D. S. (2014). Age: Does it Matter for Firms to Perform? International Journal of Academic Research in Business and Social Sciences, 4(3), 252–260. https://doi.org/10.6007/IJARBSS/v4-i3/704
Orij, R. (2010). Corporate social disclosures in the context of national cultures and stakeholder theory. Accounting, Auditing & Accountability Journal, 23(7), 868–889.
Reverte, C. (2009). Determinants of corporate social responsibility disclosure ratings by Spanish listed firms. Journal of Business Ethics, 88(2), 351–366. https://doi.org/10.1007/s10551-008-9968-9
Saleh, N., Ahmad, M., & Ishwerf, A. I. (2014). Forces and Obstacles for Corporate Environmental Disclosure (CED) in Libya: Perspective of Stakeholders. Review of Integrative Business and Economics Research, 3(1), 2304–1013.
Sheng, M. E. N. (2013). Empirical Study on Influencing Factors of Corporate Social Responsibility Performance Degree: From the Perspective of the Nature and Function of State- owned Enterprises in China. Management Science and Engineering, 7(2), 75–79. https://doi.org/10.3968/j.mse.1913035X20130702.3379
Sulkowski, A. J. (2010). Environmental Disclosure, Environmental Performance, and Firm Characteristics: An Analysis of S&P 100 Firms. Journal of Academy of Business and Economics, 10(4), 73–83. https://doi.org/10.2139/ssrn.1861008
Susi. (2009). the Occurrence of Environmental Disclosures in the Annual Reports. JAAI, 13(1), 29–42.
Van De Burgwal, D., José, R., & Vieira, O. (2014). Environmental Disclosure Determinants in Dutch Listed Companies. Revista Contabilidade & Finanças, 2511(64), 60–78.
Van der Laan, S. (2009). The Role of Theory in Explaining Motivation for Corporate Social Disclosures. Australasian Accounting, Business and Finance Journal, Vol 3(Issue 4), Pp 15-29.
Wahyuningsih, A., & Mahdar, N. M. (2018). Pengaruh Size , Leverage dan Profitabilitas Terhadap Pengungkapan Csr Pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia. Jurnal Bisnis Dan Komunikasi, 5(1), 27–36. https://doi.org/10.1097/00006982-200502000-00005
Wang, J., & Zhang, B. (2019). Quality of environmental information disclosure and enterprise characteristics. Management of Environmental Quality: An International Journal. https://doi.org/10.1108/meq-11-2018-0194
Wang, Yu, H., & Ahsan, T. (2016). The Impact of Environmental Information Disclosure on Business Performance : Evidence from High-Polluting Industries in China. European Journal of Business and Management, 8(18), 13–21.
Zhang, J., Djajadikerta, H. G., & Trireksani, T. (2018). Determinants of Corporate Environmental and Social Disclosures in China: A Comparative Study within High-profile Industries. Asian Journal of Finance & Accounting, 10(1), 308. https://doi.org/10.5296/ajfa.v10i1.12658
DOI: https://doi.org/10.24198/jaab.v4i1.31489
Refbacks
- There are currently no refbacks.
Copyright (c) 2021 Journal of Accounting Auditing and Business
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Journal of Accounting Auditing and Business (JAAB) Indexed in:
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.