The Moderating Effect of Competitive Business Strategy on Corporate Environmental Performance and Corporate Carbon Emission Disclosure Towards Corporate Financial Performance

Abstract

The purpose of this research is to examine the effect of corporate environmental performance and corporate carbon emission disclosure toward corporate financial performance with competitive business strategy as moderating variable. The research design is quantitative methods using secondary data, which is data from the sustainability report of 18 go public companies listed on the Indonesia stock exchange from 2015 to 2017, with 54 units of analysis for the period of 2015-2017. The data analysis used in this research was multiple linear regression with data panel, which is processed by using SPSS. The results show that: (i) corporate environmental performance has a positive and significant effect towards the corporate financial performance; (ii) corporate carbon emission disclosure has not a significant effect towards the corporate financial performance; (iii) competitive business strategy strengthens the effect of corporate environmental performance towards the corporate financial performance; (iv) competitive business strategy has not effect of corporate carbon emission disclosure towards the corporate financial performance. This research contributes to provide the corporate environmental performance literature, corporate carbon emission disclosure literature, and corporate financial performance literature. The results of this study can contribute to making consideration for go public companies to consider whether corporate carbon emission disclosure are needed or not in the direction of the corporate financial performance.

Carbon Emission Disclosure Viewed from Competitive Business Strategy and Environmental Performance: India's Perspective

“…Based on the results of the data test in Table8, the prob>f result is 0.0000, which means that this number is smaller than the constant value of 0.05, Disclosure; this is evidenced by the results of the coefficient of determination test where the coefficient value of the ComBusStra variable is 0.0378854.From the results of the test of the coefficient of determination, it can be concluded that every increase of 1 ComBusStra unit will increase CED by 0.0378854. This is similar to research conducted byRusli et al (2019), which proves that Competitive Business Strategy cannot moderate the relationship between Corporate Carbon Emission Disclosure and Corporate Financial Performance.The ComBusStra variable is also not in line with stakeholder theory, which means that there is no emphasis on companies running CED by carrying out a good competitive strategy. Companies prefer to increase sales rather than fulfill stakeholder requests to disclose CED.…”

“…Several studies analyzing the effect of disclosing company carbon emissions on company financial performance conducted by Al-Rdaydeh (2018) stated that a competitive business strategy strengthens the influence between the company's environmental performance and the company's financial performance. However, Rusli et al (2019)…”

Does Readability Annual Report, External Pressure, and Social Responsibility Disclosure Affect Carbon Emission Disclosure?

“…The theoretical framework for social responsibility disclosure is based on stakeholder theory and institutional theory. Stakeholder theory explains that companies need to have benefits for stakeholders besides the entity operating for its interests [3,55]. Thus, the company certainly needs to carry out social activities and provide this information to its stakeholders as a form of corporate responsibility.…”

“…Global warming is the main problem of climate change caused by human activities such as burning fossil fuels and oil, which causes carbon dioxide in the atmosphere [1]. Therefore, global warming has become an increasing political and trade issue vital for most countries [2,3].…”

The Effect of Ceo Characteristics and Carbon Emission Disclosure on Firm Performance With Business Ethics Disclosure as a Moderating Variable

“…Furthermore, Hossain et al (2017) support stakeholder theories that Boards of Directors serve as a liaison mechanism between enterprises and their stakeholders, as well as providing legitimacy to diverse stakeholder groups in society. Then, based on the legitimacy theory, the firm will focus on its relationship with society through regulations made by the government (Rusli et al, 2019).…”