The Effect Of Greenhouse Gas Emissions Disclosure And Environmental Performance On Firm Value: Indonesia Evidence
Abstract
This study aimed to investigates the effect of greenhouse gas emissions disclosure and environmental performance on firm value. The samples were companies participating in the Performance Rating Assessment Programme on Environment Management (PROPER/Program Penilaian Peringkat Kinerja Perusahaan) of the Ministry of Environment Republic of Indonesia that are listed in the Indonesia Stock Exchange (BEI) 2014-2017 period. The data used were secondary data from annual reports and/or sustainability reports. This study uses moderated regression analysis with panel data processed by using EViews. The results of this research found that greenhouse gas emissions disclosure and environmental performance have a positive effect on firm value. Environmental performance can moderate the relationship between greenhouse gas emissions disclosure and firm value. Debt to equity ratio and net operating income as control variables have a positive effect on firm value, but firm size has a negative effect on firm value.
Keywords: Carbon Disclosure; Greenhouse Gas Emissions; Environmental Performance; Firm Value
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References
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Aerts, W, and D Cormier. "Media legitimacy and corporate environmental communication." Accounting, Organizations and Society 34, no. 1 (2009): 1-27.
Ahmad, N., N., N., and D., M. Hossain. "Climate change and global warming discourses and disclosures in the corporate annual reports: A study on the Malaysian companies." Procedia - Social and Behavioral Sciences 172 (2015): 246-253.
Al-Tuwaijri, S.A., T.E. Christensen, and K., E. Hughes II. "The relations among environmental disclosure, environmental performance, and economic performance: A simultaneous equations approach." Accounting, Organizations, and Society 29 (2004): 447-471.
Anggraeni, Dian Yuni. "Pengungkapan emisi gas rumah kaca, kinerja lingkungan, dan nilai perusahaan." Jurnal Akuntansi dan Keuangan Indonesia 12, no. 2 (2015): 188-209.
Arimura, Toshi, H., Akira Hibiki, and Hajime Katayama. "Is a voluntary approach an effective environmental policy instrument?" Journal of Environmental Economics and Management 55, no. 3 (2008): 281-295.
Brigham, E., F., and J., F. Houston. Fundamentals of Financial Management. 11. South-Western, 2007.
Campbell, D., P. Shrives, and H.B. Saager. "Voluntary disclosure of mission statements in corporate annual reports: signaling what and to whom?" Business and Society Review 106, no. 1 (2001): 65–87.
Choi, Bo, Bae, Doowon Lee, and Jim Psaros. "An analysis of Australian company carbon emission disclosures." Pacific Accounting Review 25, no. 1 (2013): 58-79.
Clarkson, P., Y. Li, G. Richardson, and F. Vasvari. "Revisiting the relation between environmental performance and environmental disclosure: an empirical analysis." Accounting, Organization and Society 33, no. 4-5 (2008): 303-327.
Cucchiella, F., M. Gastaldi, and M. Miliacca. "The management of greenhouse gas emissions and its effects on firm performance." Journal of Cleaner Production 167 (2017): 1387-1400.
Dhaliwal, D.S., O.Z. Li, A. Tsang, and Y.G. Yang. "Voluntary nonfinancial disclosure and the cost of equity capital: the initiation of corporate social responsibility reporting." The Accounting Review 86, no. 1 (2011): 59-100.
Diamond, D, W. "Optimal release of information by firms." The Journal of Finance 40, no. 4 (1985): 1071-1094.
Dunlap, and Saarce. "Enviromental problems and protection." Public Opinion Quarterly 55, no. 4 (1991): 651-672.
Ganda, Fortune. "The influence of carbon emissions disclosure on company financial value in an emerging economy." Environment, Development and Sustainability 20 (2017): 1-10.
Ghozali, I., and A. Chariri. Teori Akuntansi. Semarang: Badan Penerbit Universitas Diponegoro, 2007.
Griffin, P., and Y. Sun. "Going green: Market Reactions to CSR newswire releases." Journal of Accounting and Public Policy 32, no. 2 (2013).
Guidry, R.P., and D.M. Patten. "Market reactions to the first-time issuance of corporate sustainability reports: evidence that quality matters." Sustainability Accounting, Management and Policy Journal 1, no. 1 (2010): 33-50.
Guthrie, J., and L., D. Parker. "Corporate social reporting: a rebuttal of legitimacy theory." Accounting & Business Research 9, no. 76 (1989): 343-352.
Hart, S, L, and G Ahuja. "Does it pay to be green? An empirical examination of the relationship between emission reduction and firm performance." Business Strategy and the Environment 5, no. 1 (1996): 30-47.
Hassel, L., S. Nyquist, and H. Nilsson. "The value relevance of environmental performance." European Accounting Review 14, no. 1 (2005): 41-61.
Healy, P., M., and K., G. Palepu. "Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature." Journal of Accounting and Economics 31, no. 1-3 (2001): 405-440.
Hooghiemstra, Reggy. "Corporate communication and impression management–new perspectives why companies engage in corporate social reporting." Journal of business ethics 27, no. 1 (2000): 55-68.
Hsu, A. W., and T. Wang. "Does the market value corporate response to climate change?" Omega 41, no. 2 (2013): 195-206.
Hutchinson, R., W. "The capital structure and investment decision of the small owner-managed firm: Some explanatory issues." Journal of Small Business Economics 76 (1995): 231-239.
Iatidris, G., E. "Environmental disclosure quality: Evidence on environmental performance, corporate governance and value relevance." Emerging Market Review 14 (2013): 55-75.
Intergovernmental Panel on Climate Change. "Climate change 2014: synthesis report." Contribution of working Groups I, II and III to the fifth assessment report of the Intergovernmental Panel on Climate Change. Geneva: IPCC, 2014.
Jaggi, B, and M Freedman. "An examination of the impact of pollution performance on economic and market performance: pulp and paper firms." Journal of Business Finance & Accounting 19, no. 5 (1992): 697-713.
Jaggi, Bikki, Alessandra Allini, Riccardo Macchioni, and Annamaria Zampella. "Do investors find carbon information useful? Evidence from Italian firms." Review of Quantitative Finance and Accounting 50, no. 4 (2018): 1031-1056.
Johnston, J., S. "Signaling Social Responsibility: on the Law and Economics of Market Incentives for Corporate Environmental Performance." Working paper 66. University of Pennsylvania Law School, 2005.
Jones, T. M. "Instrumental stakeholder theory - A synthesis of ethics and economics." Academy of Management Reviews 20 (1995): 404-437.
Jose, A., and S. M. Lee. "Environmental reporting of global corporations: A content analysis based on website disclosures." Journal of Business Ethics 72, no. 4 (2006): 307-201.
Kodongo, Odongo, Thabang Mokoaleli-Mokoteli, and Leonard, N. Maina. "Capital structure, profitability and firm value: Panel evidence of listed firms in Kenya." The African Finance Journal, Africagrowth Institute 17, no. 1 (2015): 1-20.
Lambert, R, C Leuz, and R Verrecchia. "Accounting information, disclosure, and the cost of capital." Journal of Accounting Research 45, no. 2 (2007): 385-420.
Lewandowski, Stefan. "Corporate carbon and financial performance: The role of emission reductions." Business Strategy and the Environment 26, no. 8 (2017): 1196-1211.
Lindblom, C., K. "The implications of organizational legitimacy for corporate social performance and disclosure." Paper presented at the Critical Perspectives on Accounting Conference. New York, 1994.
Lubis, Ignatius Leonardus, Bonar M Sinaga, and Hendro Sasongko. "Pengaruh profitabilitas, struktur modal, dan likuiditas terhadap nilai perusahaan." Jurnal Aplikasi Bisnis dan Manajemen 3, no. 3 (2017): 458-465.
Luo, L., and Q Tang. "Does voluntary carbon disclosure re?ect underlying carbon performance?" Journal of Contemporary Accounting & Economics 10, no. 3 (2014): 191-205.
Mai, M., U. "Analisis variabel-variabel yang mempengaruhi struktur modal pada perusahaan LQ-45 di Bursa Efek Jakarta." Ekonomika, 2006: 228-245.
Matsumura, E. M., R. Prakash, and S. C. Vera-Munoz. "Firm-value effects of carbon Emissions and carbon disclosures." The Accounting Review 89, no. 2 (2014): 695-724.
Milgrom, P. R. "Good news and bad news: Representation theorems and applications." Bell Journal of Economics (Autumn), 1981: 380–391.
Ministry of Environment. Performance Rating Assessment Programme on Environment Management. 2013. http://proper.menlhk.go.id.
Ministry of Environment. "Republic of Indonesia Ministry of Environment Regulation Number 6 of 2013 Performance Rating Assessment Programme on Environment Management." Jakarta, 2013.
Morris, R. "Signalling, agency theory and accounting policy choice." Accounting and Business Research 18, no. 69 (1978): 47-56.
Najah, M., S., M.,. Carbon risk management, carbon disclosure and stock market effects: An international perspective. University of Southern Queensland, 2012.
Oboh, Collins, Envulu, Isa Filibus, and Adeleke, Clement. Adekoya. "Corporate capital structure and corporate market value: Empirical evidence from Nigeria." International Journal of Economics and Finance 4, no. 12 (2012): 193-201.
Oliveira, Manuel Au-Yong, and João José Pinto Ferreira. "Facilitating qualitative research in business studies: Using the business narrative to model value creation." African Journal of Business Management 5, no. 1 (2011): 68-75.
Porter, M, E, and Cvd Linde. "Toward a new conception of the environment- competitiveness relationship." The Journal of Economic Perspectives 9, no. 4 (1995a): 97-118.
Prado-Lorenzo, J., L. Rodríguez?Domínguez, I. Gallego?Álvarez, and I. García?Sánchez. "Factors in?uencing the disclosure of greenhouse gas emissions in companies world-wide." Management Decision 47, no. 7 (2009): 1133-1157.
Rokhmawati, Andewi, Milind Sathye, and Suneeta Sathye. "Effect of GHG emission, environmental performance, and social performance on financial performance of listed manufacturing firms in Indonesia." Procedia - Social and Behavioral Sciences 211 (2015): 461-470.
Saeedi, A., and I. Mahmoodi. "Capital structure and firm performance: Evidence from Iranian Companies." Int. Research J. Finance and Economics, 2011.
Saka, C., and T. Oshika. "Disclosure effects, carbon emissions and corporate value." Sustainability Accounting, Management and Policy Journal 5, no. 1 (2014): 22-45.
Siregar, Sylvia Veronica, and Refandi Budi Deswanto. "Association between environmental disclosures with financial performance, environmental performance, and firm value." Social Responsibility Journal 4, no. 1 (2018): 180-193.
Sujoko, and U Soebiantoro. "Pengaruh struktur kepemilikan, leverage, faktor intern, dan faktor ekstern terhadap nilai perusahaan (studi empirik pada perusahaan manufaktur dan non manufaktur di bursa efek Jakarta)." Jurnal Manajemen dan Kewirausahaan 9, no. 1 (2007): 41-49.
Suratno, I. Bondan, Darsono, and S. Mutmainah. "Pengaruh Environmental Performance terhadap Environmental Disclosure dan Economic Performance." Paper presented at Simposium Nasional Akuntansi 9. Padang, 2006.
Tahir, Izah Mohd, and Ahmad Rizal Razali. "The relationship between enterprise risk management (ERM) and firm value: Evidence From Malaysian public listed companies." International Journal of Economics and Management Sciences 1, no. 2 (2011): 32-41.
Titisari, Kartika, Hendra, and Khara. Alviana. "Pengaruh environmental performance terhadap economic performance." Jurnal Akuntansi dan Keuangan Indonesia 9 (2012): 56-67.
Tjahjono, Mazda Eko Sri. "Pengaruh kinerja lingkungan terhadap nilai perusahaan dan kinerja keuangan." Jurnal Ekonomi 4, no. 1 (2013): 38-46.
Weston, John, Fred, and Thomas, E. Copeland. Managerial finance. New York: Dryden Press, 1986.
Wibisono, Yusuf. Membedah konsep dan aplikasi corporate social responsibility (CSR). Gresik: Fascho Publishing, 2007.
Yadav, Prayag Lal, Seung Hun Han, and Jae Jeung Rho. "Impact of environmental performance on firm value for sustainable investment: Evidence from large US firms." Business Strategy and the Environment 25, no. 6 (2015): 402-420.
Aerts, W, and D Cormier. "Media legitimacy and corporate environmental communication." Accounting, Organizations and Society 34, no. 1 (2009): 1-27.
Ahmad, N., N., N., and D., M. Hossain. "Climate change and global warming discourses and disclosures in the corporate annual reports: A study on the Malaysian companies." Procedia - Social and Behavioral Sciences 172 (2015): 246-253.
Al-Tuwaijri, S.A., T.E. Christensen, and K., E. Hughes II. "The relations among environmental disclosure, environmental performance, and economic performance: A simultaneous equations approach." Accounting, Organizations, and Society 29 (2004): 447-471.
Anggraeni, Dian Yuni. "Pengungkapan emisi gas rumah kaca, kinerja lingkungan, dan nilai perusahaan." Jurnal Akuntansi dan Keuangan Indonesia 12, no. 2 (2015): 188-209.
Arimura, Toshi, H., Akira Hibiki, and Hajime Katayama. "Is a voluntary approach an effective environmental policy instrument?" Journal of Environmental Economics and Management 55, no. 3 (2008): 281-295.
Brigham, E., F., and J., F. Houston. Fundamentals of Financial Management. 11. South-Western, 2007.
Campbell, D., P. Shrives, and H.B. Saager. "Voluntary disclosure of mission statements in corporate annual reports: signaling what and to whom?" Business and Society Review 106, no. 1 (2001): 65–87.
Choi, Bo, Bae, Doowon Lee, and Jim Psaros. "An analysis of Australian company carbon emission disclosures." Pacific Accounting Review 25, no. 1 (2013): 58-79.
Clarkson, P., Y. Li, G. Richardson, and F. Vasvari. "Revisiting the relation between environmental performance and environmental disclosure: an empirical analysis." Accounting, Organization and Society 33, no. 4-5 (2008): 303-327.
Cucchiella, F., M. Gastaldi, and M. Miliacca. "The management of greenhouse gas emissions and its effects on firm performance." Journal of Cleaner Production 167 (2017): 1387-1400.
Dhaliwal, D.S., O.Z. Li, A. Tsang, and Y.G. Yang. "Voluntary nonfinancial disclosure and the cost of equity capital: the initiation of corporate social responsibility reporting." The Accounting Review 86, no. 1 (2011): 59-100.
Diamond, D, W. "Optimal release of information by firms." The Journal of Finance 40, no. 4 (1985): 1071-1094.
Dunlap, and Saarce. "Enviromental problems and protection." Public Opinion Quarterly 55, no. 4 (1991): 651-672.
Ganda, Fortune. "The influence of carbon emissions disclosure on company financial value in an emerging economy." Environment, Development and Sustainability 20 (2017): 1-10.
Ghozali, I., and A. Chariri. Teori Akuntansi. Semarang: Badan Penerbit Universitas Diponegoro, 2007.
Griffin, P., and Y. Sun. "Going green: Market Reactions to CSR newswire releases." Journal of Accounting and Public Policy 32, no. 2 (2013).
Guidry, R.P., and D.M. Patten. "Market reactions to the first-time issuance of corporate sustainability reports: evidence that quality matters." Sustainability Accounting, Management and Policy Journal 1, no. 1 (2010): 33-50.
Guthrie, J., and L., D. Parker. "Corporate social reporting: a rebuttal of legitimacy theory." Accounting & Business Research 9, no. 76 (1989): 343-352.
Hart, S, L, and G Ahuja. "Does it pay to be green? An empirical examination of the relationship between emission reduction and firm performance." Business Strategy and the Environment 5, no. 1 (1996): 30-47.
Hassel, L., S. Nyquist, and H. Nilsson. "The value relevance of environmental performance." European Accounting Review 14, no. 1 (2005): 41-61.
Healy, P., M., and K., G. Palepu. "Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature." Journal of Accounting and Economics 31, no. 1-3 (2001): 405-440.
Hooghiemstra, Reggy. "Corporate communication and impression management–new perspectives why companies engage in corporate social reporting." Journal of business ethics 27, no. 1 (2000): 55-68.
Hsu, A. W., and T. Wang. "Does the market value corporate response to climate change?" Omega 41, no. 2 (2013): 195-206.
Hutchinson, R., W. "The capital structure and investment decision of the small owner-managed firm: Some explanatory issues." Journal of Small Business Economics 76 (1995): 231-239.
Iatidris, G., E. "Environmental disclosure quality: Evidence on environmental performance, corporate governance and value relevance." Emerging Market Review 14 (2013): 55-75.
Intergovernmental Panel on Climate Change. "Climate change 2014: synthesis report." Contribution of working Groups I, II and III to the fifth assessment report of the Intergovernmental Panel on Climate Change. Geneva: IPCC, 2014.
Jaggi, B, and M Freedman. "An examination of the impact of pollution performance on economic and market performance: pulp and paper firms." Journal of Business Finance & Accounting 19, no. 5 (1992): 697-713.
Jaggi, Bikki, Alessandra Allini, Riccardo Macchioni, and Annamaria Zampella. "Do investors find carbon information useful? Evidence from Italian firms." Review of Quantitative Finance and Accounting 50, no. 4 (2018): 1031-1056.
Johnston, J., S. "Signaling Social Responsibility: on the Law and Economics of Market Incentives for Corporate Environmental Performance." Working paper 66. University of Pennsylvania Law School, 2005.
Jones, T. M. "Instrumental stakeholder theory - A synthesis of ethics and economics." Academy of Management Reviews 20 (1995): 404-437.
Jose, A., and S. M. Lee. "Environmental reporting of global corporations: A content analysis based on website disclosures." Journal of Business Ethics 72, no. 4 (2006): 307-201.
Kodongo, Odongo, Thabang Mokoaleli-Mokoteli, and Leonard, N. Maina. "Capital structure, profitability and firm value: Panel evidence of listed firms in Kenya." The African Finance Journal, Africagrowth Institute 17, no. 1 (2015): 1-20.
Lambert, R, C Leuz, and R Verrecchia. "Accounting information, disclosure, and the cost of capital." Journal of Accounting Research 45, no. 2 (2007): 385-420.
Lewandowski, Stefan. "Corporate carbon and financial performance: The role of emission reductions." Business Strategy and the Environment 26, no. 8 (2017): 1196-1211.
Lindblom, C., K. "The implications of organizational legitimacy for corporate social performance and disclosure." Paper presented at the Critical Perspectives on Accounting Conference. New York, 1994.
Lubis, Ignatius Leonardus, Bonar M Sinaga, and Hendro Sasongko. "Pengaruh profitabilitas, struktur modal, dan likuiditas terhadap nilai perusahaan." Jurnal Aplikasi Bisnis dan Manajemen 3, no. 3 (2017): 458-465.
Luo, L., and Q Tang. "Does voluntary carbon disclosure re?ect underlying carbon performance?" Journal of Contemporary Accounting & Economics 10, no. 3 (2014): 191-205.
Mai, M., U. "Analisis variabel-variabel yang mempengaruhi struktur modal pada perusahaan LQ-45 di Bursa Efek Jakarta." Ekonomika, 2006: 228-245.
Matsumura, E. M., R. Prakash, and S. C. Vera-Munoz. "Firm-value effects of carbon Emissions and carbon disclosures." The Accounting Review 89, no. 2 (2014): 695-724.
Milgrom, P. R. "Good news and bad news: Representation theorems and applications." Bell Journal of Economics (Autumn), 1981: 380–391.
Ministry of Environment. Performance Rating Assessment Programme on Environment Management. 2013. http://proper.menlhk.go.id.
Ministry of Environment. "Republic of Indonesia Ministry of Environment Regulation Number 6 of 2013 Performance Rating Assessment Programme on Environment Management." Jakarta, 2013.
Morris, R. "Signalling, agency theory and accounting policy choice." Accounting and Business Research 18, no. 69 (1978): 47-56.
Najah, M., S., M.,. Carbon risk management, carbon disclosure and stock market effects: An international perspective. University of Southern Queensland, 2012.
Oboh, Collins, Envulu, Isa Filibus, and Adeleke, Clement. Adekoya. "Corporate capital structure and corporate market value: Empirical evidence from Nigeria." International Journal of Economics and Finance 4, no. 12 (2012): 193-201.
Oliveira, Manuel Au-Yong, and João José Pinto Ferreira. "Facilitating qualitative research in business studies: Using the business narrative to model value creation." African Journal of Business Management 5, no. 1 (2011): 68-75.
Porter, M, E, and Cvd Linde. "Toward a new conception of the environment- competitiveness relationship." The Journal of Economic Perspectives 9, no. 4 (1995a): 97-118.
Prado-Lorenzo, J., L. Rodríguez?Domínguez, I. Gallego?Álvarez, and I. García?Sánchez. "Factors in?uencing the disclosure of greenhouse gas emissions in companies world-wide." Management Decision 47, no. 7 (2009): 1133-1157.
Rokhmawati, Andewi, Milind Sathye, and Suneeta Sathye. "Effect of GHG emission, environmental performance, and social performance on financial performance of listed manufacturing firms in Indonesia." Procedia - Social and Behavioral Sciences 211 (2015): 461-470.
Saeedi, A., and I. Mahmoodi. "Capital structure and firm performance: Evidence from Iranian Companies." Int. Research J. Finance and Economics, 2011.
Saka, C., and T. Oshika. "Disclosure effects, carbon emissions and corporate value." Sustainability Accounting, Management and Policy Journal 5, no. 1 (2014): 22-45.
Siregar, Sylvia Veronica, and Refandi Budi Deswanto. "Association between environmental disclosures with financial performance, environmental performance, and firm value." Social Responsibility Journal 4, no. 1 (2018): 180-193.
Sujoko, and U Soebiantoro. "Pengaruh struktur kepemilikan, leverage, faktor intern, dan faktor ekstern terhadap nilai perusahaan (studi empirik pada perusahaan manufaktur dan non manufaktur di bursa efek Jakarta)." Jurnal Manajemen dan Kewirausahaan 9, no. 1 (2007): 41-49.
Suratno, I. Bondan, Darsono, and S. Mutmainah. "Pengaruh Environmental Performance terhadap Environmental Disclosure dan Economic Performance." Paper presented at Simposium Nasional Akuntansi 9. Padang, 2006.
Tahir, Izah Mohd, and Ahmad Rizal Razali. "The relationship between enterprise risk management (ERM) and firm value: Evidence From Malaysian public listed companies." International Journal of Economics and Management Sciences 1, no. 2 (2011): 32-41.
Titisari, Kartika, Hendra, and Khara. Alviana. "Pengaruh environmental performance terhadap economic performance." Jurnal Akuntansi dan Keuangan Indonesia 9 (2012): 56-67.
Tjahjono, Mazda Eko Sri. "Pengaruh kinerja lingkungan terhadap nilai perusahaan dan kinerja keuangan." Jurnal Ekonomi 4, no. 1 (2013): 38-46.
Weston, John, Fred, and Thomas, E. Copeland. Managerial finance. New York: Dryden Press, 1986.
Wibisono, Yusuf. Membedah konsep dan aplikasi corporate social responsibility (CSR). Gresik: Fascho Publishing, 2007.
Yadav, Prayag Lal, Seung Hun Han, and Jae Jeung Rho. "Impact of environmental performance on firm value for sustainable investment: Evidence from large US firms." Business Strategy and the Environment 25, no. 6 (2015): 402-420.
Published
2019-01-23
How to Cite
GABRIELLE, Gabrielle; TOLY, Agus Arianto.
The Effect Of Greenhouse Gas Emissions Disclosure And Environmental Performance On Firm Value: Indonesia Evidence.
Jurnal Ilmiah Akuntansi dan Bisnis, [S.l.], v. 14, n. 1, p. 106-119, jan. 2019.
ISSN 2303-1018.
Available at: <https://ojs.unud.ac.id/index.php/jiab/article/view/43940>. Date accessed: 26 apr. 2024.
doi: https://doi.org/10.24843/JIAB.2019.v14.i01.p10.
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