Determinants of environmental disclosure of mining industry near the COVID-19 outbreak: Some Indonesian evidence

Abstract

In their business operations, mining companies that process natural resources must deal with environmental degradation. The companies shall do environmental preservation to mitigate global warming due to business processes and make an environmental responsibility report to ensure a sustainable business. Whether the COVID-19 pandemic affects environmental responsibility is the focus of this study. The pandemic disrupts all sectors, including the mining industry. Therefore, this study investigates the level of environmental reporting made by mining companies before and after the COVID-19 outbreak. In addition, this study also investigates the determinants of the level of environmental reporting disclosed in either the annual report or sustainability report. Thirty-seven companies listed on the Indonesia Stock Exchange in the mining sector in 2019 and 2020 were used as a sample. Results from the Wilcoxon signed rank analysis suggest that the level of environmental disclosure increased following the epidemic’s spread, contrasted to levels prior to the outbreak. The multiple regression analysis reveals that public ownership and size are likely to enhance environmental disclosure. Meanwhile, leverage tends to reduce environmental disclosure. The analysis offers perspective on the capital market authority agency’s new strategy aimed at enhancing aspects that could influence environmental responsibility disclosure.