Does Environmental Information Disclosure Mediate the Effect of Environmental Cost on Environmental Performance?


Environmental performance is a measure created by the Government to determine the company’s concern for the environment. Environmental costs are sacrifices made by companies to obtain good environmental performance. In addition, companies can disclose information about the activities they have carried out to preserve the environment. The purpose of this study was to determine the effect of environmental costs on environmental performance, mediated by environmental information disclosure. Data were obtained from the annual reports of 12 manufacturing companies in Indonesia, registered from 2015-2019. These companies were selected using purposive sampling. The results indicated that: 1) environmental costs had no effect on environmental performance; 2) environmental costs had a positive and significant effect on disclosure of environmental information; 3) disclosure of environmental information had a positive and significant effect on environmental performance; and 4) disclosure of environmental information mediated the effect of environmental costs on environmental performance. Based on these findings, Indonesian manufacturing companies should increase the quality of their disclosure of environmental information.

Keywords: environmental cost, environmental performance, environmental information disclosure

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