The Determinants of Carbon Emission Disclosures with Proper Rating as a Mediating Variable in Non-Financial Companies in Indonesia

Abstract

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.