Environmental disclosure and its determinants

Abstract

Nowadays, companies are required to report not only about their economic performance but also about the social and environmental aspects of their operations. This is because social and environmental disclosures are seen as increasingly significant in terms of their influence on the survival of the company. The purpose of this study is to see how firm size, profitability, leverage, and managerial ownership affect environmental disclosure. The population of this study comprises non-financial sector companies listed on the Indonesia Stock Exchange (IDX) between 2017 and 2020. Purposive sampling was used, yielding 160 units to be analysed. A documentation technique was used to collect the research data that were used. The data came from the IDX website as well as from the official websites of each company. Descriptive statistical analysis and regression testing using SPSS were used. The results show that profitability and leverage have a negative effect on environmental disclosure. A suggestion stemming from this research is that companies should increase their environmental disclosure in order to ensure the transparency and accountability of their information in the eyes of the public. Future research is expected to be able to use all financial ratios to assess the impact of financial performance on company environmental disclosures.