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.