The results of previous studies vary regarding the effect of company size and financial performance on disclosure of carbon emissions. This article aims to find empirical evidence of the effect of company size and financial performance on disclosure of carbon emissions by adding PROPER rating as a mediating variable as the novelty of this study. The population is 144 non-financial companies listed on the IDX in 2015-2019. The results show that company size affects PROPER rating and disclosure of carbon emissions. Meanwhile, financial performance has no effect on disclosure of carbon emissions with a PROPER rating. PROPER rating can mediate the effect of company size on disclosure of carbon emissions, but PROPER rating is not able to mediate ROA on Carbon Emissions. The implications of the findings of this research, companies, governments, investors and stakeholders in decision making related to Carbon Emission Disclosure. For example choosing a company that has a greater level of relationship with the environment or including a high-profile company as a place to invest. In addition, academics can develop models and replace financial performance proxies with other proxies related to leverage, liquidity and solvency.
Prior studies on carbon emission disclosure have found conflicting results regarding the role of firm size, leverage, and financial performance in explaining carbon emission disclosure. This study attempts to probe the issue by introducing PROPER rating as mediating variable. Specifically, this study examines the role of PROPER rating in moderating the effect of firm size, financial performance, and leverage on carbon emission disclosure. Sample was selected from IDX for period of 2015-2019. As much as 150 firm observations were available for test of hypothesis. Using mediating regression analysis, results showed that company size is associated with PROPER rating. Leverage and financial performance have no effect on PROPER rating. In addition, while company size and leverage variable are associated with carbon emission disclosure, financial performs has no effect on carbon emission disclosure. PROPER rating can mediate the relationship between company size and carbon emission disclosure.
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