Carbon Emission Disclosure and Profitability – Evidence from Manufacture Companies in Indonesia
Abstract
This research aims to prove empirically the effect of size, leverage, and composition of the board of commissioners to carbon emission disclosure (CED) and the effect of CED on future profitability. The population of this study are a manufacturing companies listed on the Indonesia Stock Exchange (BEI). Samples were determined by purposive sampling and 107 units of analysis were obtained. Data analysis using path analysis method. The results shows that size has a positive effect on CED. Leverage and ratio of independent board commissioners have no impact on CED. Leverage has a negative effect on profitability. Size and ratio of independent commissioners have no effect on profitability. Companies that has high CED have not affect to future profitability. Furthermore, CED variables is not as mediate variable between size, leverage, independent board ratio on profitability. The implications of the result study are that CEDs that are still voluntary have not had a beneficial impact on the company. Suggestions for regulators to increase awareness of corporate, and community to use CED indicators as main indicator in deciding investment and other business policies.
Keywords: Carbon Emission Disclosure (CED), Profitability, Size, Leverage, and Board Independent.
References
[1] Ahmad, N., Salman, A., & Shamsi, A. F. (2015). Impact of Financial Leverage on Firms ’ Profitability: An Investigation from Cement Sector of Pakistan. Research Journal Of Finance And Accounting, 6(7), 75–81.
[2] Akhiroh, T., & Kiswanto. (2016). The Determinant Of Carbon Emission Disclosures. Accounting Analysis Journal, 5(4), 326–336.
[3] Andriyani, R., & Khafid, M. (2014). Analisis Pengaruh Leverage, Ukuran Perusahaan dan Voluntary Disclosure Terhadap Manipulasi Aktivitas Riil. Accounting Analysis Journal, 3(3), 273–281.
[4] Anggraeni, D. Y. (2015a). Pengungkapan Emisi Gas Rumah Kaca, Kinerja Lingkungan, dan Nilai Perusahaan. Jurnal Akuntansi Dan Keuangan, 12(2), 188–209.
[5] Anggraeni, D. Y. (2015b). Pengungkapan Emisi Gas Rumah Kaca, Kinerja Lingkungan, Dan Nilai Perusahaan - (Greenhouse Gas Emission Disclosure, Environmental Performance, and Firm Value). Jurnal Akuntansi Dan Keuangan Indonesia, 12(2), 188– 209.
[6] Aulia, F. Z., & Agustina, L. (2015). Pengaruh Karakteristik Perusahaan, Kinerja Lingkungan, dan Liputan Media terhadap Environmental Disclosure. Accounting Analysis Journal, 4(3), 1–8.
[7] Babalola, Y. A. (2013). The Effect of Firm Size on Firms Profitability in Nigeria. Journal of Economics and Sustainable Development, 4(5), 90–94.
[8] Belkhir, M. (2009). Board of directors’ size and Board of directors’ size and performance in the banking industry. International Journal of Managerial Finance, 5(2), 201–221.
[9] Certo, S. tREVIS. (2003). Influencing initial public offering investors with prestige: Signaling with board structures. Academy of Management Review, 28(3), 432–446.
[10] Ching, H. Y., & Gerab, F. (2017). Sustainability Reports In Brazil Through The Lens Of Signaling, Legitimacy And Stakeholder Theories. Social Responsibility Journal, 13(1), 95–110. https://doi.org/10.1108/SRJ-10-2015-0147
[11] Choi, B. B., Lee, D., & Psaros, J. (2013). An analysis of Australian company carbon emission disclosures. Pacific Accounting Review, 25 No.1(1), 58–79.
[12] Clarkson, P. M., Li, Y., Richardson, G. D., & Vasvari, F. P. (2008). Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis. Accounting, Organizations and Society, 33(4–5), 303–327. https://doi.org/ 10.1016/j.aos.2007.05.003
[13] Connelly, B. L., Certo, S. T., Ireland, R. D., & Reutzel, C. R. (2011). Signaling Theory: A Review and Assessment. Journal Of Management, 37(1), 39–67.
[14] Crisóstomo, V. L., Ftrire, F. S., & Vasconellos, F. C. de. (2011). Corporate social responsibility, firm value and financial performance in Brazil. Social Responcibility Journal Research Gate, 7(2), 295–309.
[15] Doğan, M. (2013). Does Firm Size Affect The Firm Profitability? Evidence from Turkey. Research Journal of Finance and Accounting, 4(4), 53–60.
[16] Donnelly, R., & Mulcahy, M. (2008). Board Structure , Ownership , and Voluntary Disclosure in Ireland. Journal Compilation, 16(5), 416–429.
[17] Gery Djajadikerta, H., & 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.
[18] Ghomi, Z. B., & Leung, P. (2013). An Empirical Analysis of the Determinants of Greenhouse Gas Voluntary Disclosure in Australia. Accounting and Finance Research, 2(1), 110–127. https://doi.org/10.5430/afr.v2n1p110
[19] Ghozali, I., & Chariri, A. (2014). Teori Akuntansi International Financial Reporting System (IFRS) (pp. 439–444). Semarang: Badan Penerbit Universitas Diponegoro.
[20] Hidayat, A. A., & Utama, S. (2003). Board Characteristics and Firm Performance: Evidence from Indonesia. International Research Journal of Business Studies, 8(3), 137–154.
[21] Hrasky, S. (2012). Carbon footprints and legitimation strategies: symbolism or action? Accounting, Auditing & Acountability Journal, 25(1), 174–198.
[22] Irwhantoko, & Basuki. (2016). Carbon Emission Disclosure: Studi pada Perusahaan Manufaktur Indonesia. Jurnal Akuntansi Dan Keuangan, 18(2), 92–104.
[23] Jahamani, Y. F. (2003). Green Accounting in Developing Countries: The Case of U . A . E . and Jordan. Managerial Finance, 29(8), 37–45.
[24] Kalu, J. U., Buang, A., & Aliagha, U. G. (2016). Determinants of voluntary carbon disclosure in the corporate real estate sector of Malaysia. Journal of Environmental Management, 182, 519–524.
[25] Kiliç, M., Kuzey, C., & Uyar, A. (2015). The impact of ownership and board structure on Corporate Social Responsibility (CSR) reporting in the Turkish banking industry. Corporate Governance, 15(3), 357–374.
[26] Krishnamurti, C., & Velayutham, E. (2017). The Influence Of Board Committee Structures On Voluntary Disclosure Of Greenhouse Gas Emissions: Australian Evidence. Pacific-Basin Finance Journal, (September 2016). https://doi.org/10.1016/ j.pacfin.2017.09.003
[27] Lanis, R., & Richardson, G. (2012). Corporate social responsibility and tax aggressiveness: a test of legitimacy theory. Accounting, Auditing & Accountability Journal, 26(1), 75–100.
[28] Lester, D. L., & Parnell, J. A. (2008). Firm size and environmental scanning pursuits across organizational life cycle stages. Journal of Small Business and Enterprise Development, 15(3), 540–554.
[29] Liao, L., Luo, L., & Tang, Q. (2014). Gender diversity , board independence , environmental committee and greenhouse gas disclosure. The British Accounting Review, 47(4), 409–424.
[30] Liu, Y. S., & Yang, J. H. (2018). A longitudinal analysis of corporate greenhouse gas disclosure strategy. The International Journal of Business in Society.
[31] Lodhia, S., & Martin, N. (2012). Stakeholder responses to the National Greenhouse and Energy Reporting Act An agenda setting perspective. Accounting, Auditing & Accountability Journal, 25(1), 126–145.
[32] Luo, L., & Tang, Q. (2014). Does voluntary carbon disclosure reflect underlying carbon performance? Journal of Contemporary Accounting & Economics, 10(3), 191– 205.
[33] Luo, L., Tang, Q., & Lan, Y.-C. (2013). Comparison of propensity for carbon disclosure between developing and developed countries A resource constraint perspective. Accounting Research Journal, 26(1), 6–34.
[34] Martin, P. R., & Moser, D. V. (2015). Managers ’ green investment disclosures and investors ’. Journal of Accounting and Economics, 1–16. https://doi.org/10.1016/j. jacceco.2015.08.004
[35] Minnemeyer, S., Harris, N., & Payne, O. (2018). Pelestarian Hutan Dapat Mengurangi Emisi Karbon Setara dengan Emisi Semua Mobil di Bumi.
[36] Mobus, J. L. (2005). Mandatory environmental disclosures in a legitimacy theory context. Accounting, Auditing & Accountability Journal, 18(4), 492–517.
[37] Mujiyono, & Nany, M. (2010). Pengaruh Leverage, Saham Publik, Size dan Komite Audit Terhadap Luas Pengungkapan Sukarela. Jurnal Dinamika Akuntansi, 2(2), 129– 134.
[38] Niresh, J. A., & Velnampy, T. (2014). Firm Size and Profitability: A Study of Listed Manufacturing Firms in Sri Lanka. International Journal of Business and Management, 9(4), 57–64.
[39] Nurkhin, A. (2010). Corporate governance dan Profitabilitas, Pengaruhnya terhadap Pengungkapan CSR Sosial Perusahaan. Jurnal Dinamika Akuntansi, 2(1), 46–55.
[40] Obradovich, J., & Gill, A. (2012). The Impact of Corporate Governance and Financial Leverage on the Value of American Firms. International Research Journal of Finance and Economics, 9, 1–14.
[41] Peng, J., Sun, J., & Luo, R. (2015). Corporate Voluntary Carbon Information Disclosure: Evidence from China’s Listed Companies. World Economy, 38(1), 91–109. https://doi. org/10.1111/twec.12187
[42] Pratama, I. G. B. A., & Wiksuana, I. G. B. (2016). Pengaruh Ukuran Perusahaan dan Leverage terhadap Nilai Perusahaan dengan Profitabilitas sebagai variabel Mediasi. E-Jurnal Manajemen Unud, 5(2), 1338–1367.
[43] Pratiwi, D. N. (2017). Pengaruh Stakeholder Terhadap Carbon Emission Disclosure, 2(01), 288–300.
[44] Primc, K., & Čater, T. (2015). Environmental proactivity and firm performance: a fuzzy-set analysis. Management Decision, 53(3), 648–667.
[45] Putri, M. R., & Zuraya, N. (2018). DKI Jakarta Targetkan Emisi Gas Rumah Kaca Turun 30 Persen.
[46] Qian, W., Hörisch, J., & Schaltegger, S. (2017). Environmental management accounting and its effects on carbon management and disclosure quality. Journal of Cleaner Production, 174, 1608–1619.
[47] Rahman, N. R. A., Rasid, S. Z. A., & Basiruddin, R. (2017). Board Effectiveness and Quality of Voluntary Carbon Reporting of Malaysian Companies. International Journal of Innovation and Business Strategy, 7(1), 1–9.
[48] Rankin, M., Windsor, C., & Wahyuni, D. (2011). An investigation of voluntary corporate greenhouse gas emissions reporting in a market governance system.Accounting, Auditing & Accountability Journal, 24(8), 1037–1070. https://doi.org/ 10.1108/09513571111184751
[49] Safitri, N. M. Y., Wahyuni, M. A., & Yuniarta, G. A. (2017). Pengaruh Kinerja Keuangan, Ukuran Perusahaan dan Struktur Kepemilikan Terhadap Profitabilitas. EJournal Universitas Pendidikan Ganesha, 7(1).
[50] Saka, C., & Oshika, T. (2014). Disclosure effects , carbon emissions and corporate value. Sustainability Accounting, Management and Policy Journal, 5(Research paper), 22–45.
[51] Tarighi Angle, I., Rezanezhad, M., & Tarighi, H. (2017). The relationship between board of directors ’ structure and company ownership with corporate social responsibility disclosure. Humanomics, 33(4), 398–418. https://doi.org/10.1108/H02-2017 0022
[52] Torchia, M., & Calabrò, A. (2016). Board of directors and financial transparency and disclosure. Evidence from Italy. The International Journal of Business in Society, 16(2), 420–436.
[53] Tunggal, W. S. P., & Facrurrozie. (2014). Pengaruh Environmental Performance, Environmental Cost dan CSR Disclosure Terhadap Financial Performance. Accounting Analysis Journal, 3(3), 310–320.
[54] Villiers, C. de, Naiker, V., & Staden, C. J. Van. (2011). The Effect of Board Characteristics on Firm Environmental Performance. Journal of Management, 37(6), 1636–1663.
[55] Widiastuti, N. A., Arifati, R., & Abrar. (2016). Journal Of Accounting, Volume 2 No.2 Maret 2016. Journal Of Accounting, 2(2).
[56] Widyati, M. F. (2013). Pengaruh Dewan Direksi, Komisaris Indepeden, Komite Audit, Kepemilikan Manajerial dan Kepemilikan Institusional terhadap Kinerja Keuangan. Jurnal Ilmu Manajemen, 1(1), 234–249.
[57] Winarsih, A. M., & Solikhah, B. (2015). Pengaruh Media, Sensitivitas Industri dan Struktur Corporate Governance Terhadap Kualitas Environmental Disclosure (Studi Pada Perusahaan High Profile di Bursa Efek Indonesia Periode 2011-2013). Accounting Analysis Journal, 4(2), 1–9.
[58] Yanto, H., & Muzzammil, B. S. (2016). A Long Way to Implement Environmental Reporting In Indonesian Mining Companies. International Journal of Applied Business and Economic Research, 14(40), 6493–6514.
[59] Yuliana, R. (2008). Pengaruh Karakteristik Perusahaan Terhadap Pengungkapan Corporat Social Responsibility (CSR) dan Dampaknya Terhadap Reaksi Investor. Jumal Akuntansi Dan Keuangan Indonesia, 5, 245–276.