What Drives Environmental Disclosure? Evidence from Mining Companies Listed on The Indonesia Stock Exchange

Abstract

This study aims to analyse the effects of environmental performance, profitability, and leverage on the environmental disclosure in mining industry sector companies listed on the Indonesia Stock Exchange. The sample of this study was 15 mining companies which were selected by using a purposive sampling technique. We collected the company's annual report over the period 2014 – 2021. The results showed that environmental performance had a positive and significant effect on environmental disclosure. In this case, the Corporate Performance Rating Program (PROPER) rating was able to prove that there was a significant influence between the Global Reporting Initiative (GRI) as a form of its responsibility and the extent of environmental disclosure. In addition, profitability produced a negative and significant effect on environmental disclosure. The company considered that it was no longer necessary to carry out environmental disclosure when the company has made a profit annually because the company's environmental performance was good. Finally, leverage had a negative and significant effect on environmental disclosure. Thus, when the leverage of the company reached the maximum point, the company chose to pay off the debt, instead of conducting environmental disclosure.

A Slight Look Environmental Disclosure Score Trends during Covid-19 Outbreak: What’s Driver the Environmental Disclosure in Indonesian Mining and Manufacturing Companies

“…Profitability was found by (Abdullah et al, 2020;Asrori et al, 2019;Maulia and Yanto, 2020;Purbawangsa et al, 2020) to be able to improve environmental disclosure practices. On the other hand (Digdowiseiso et al, 2022) found that profitability weakens environmental disclosure practices or does not have a significant correlation with environmental disclosure (Ardi and Yulianto, 2020;Junita and Yulianto, 2018;Safitri and Wahyuningrum, 2021;Solikhah and Maulina, 2021;. Leverage, which shows the company's financial condition, is known to have a negative effect (Ardi and Yulianto, 2020;Digdowiseiso et al, 2022), but several studies have found that leverage has no effect at all (Solikhah and Maulina, 2021;Solikhah et al, 2021;.…”

Environmental reporting by Indonesian agricultural companies around the spread of the COVID-19 epidemic

“…The highest score of environmental reporting is shown by PT BISI International, Tbk, which is engaged in seeds and trading of corn, vegetables and fruits, and rice seeds. The average score of environmental reporting in the agricultural industry is 34 percent, which is higher than those in the manufacturing industry (about 13 percent) [17], [22], in all listed companies in IDX ( about 9 percent) [24], and in mining companies (about 29 percent) [15].…”

“…Numerous researches on environmental disclosures have been done in underdeveloped nations, for instance, India [10,11], Malaysia [12,13], Ghana [14], and Indonesia [15][16][17][18][19]. According to these studies, the investigated variables among the determinants of environmental reporting are, among others, financial performance.…”

Factors influencing the carbon emissions disclosure in basic and chemical industrial companies listed on the IDX in 2016-2019

“…The higher the company's leverage level, the higher creditors' expectations of company performance, including its environmental performance, because environmental performance has an impact on the sustainability of company operations (Digdowiseiso et al, 2022). Companies with high leverage will result in management to reduce costs in disclosing information.…”