Does the Company's Size and Financial Health Affect on Reduces of Carbon Emissions?

Abstract

The research aims to obtain evidence regarding the effect of financial health and company affecting carbon disclosure in Indonesia with panel data and fixed effect method. The sample used in this research is non-financial sector companies listed on the Indonesia Stock Exchange in 2019-2020. The final sample selected using the purposive sampling method is 102 companies within two years of observation according to predetermined sample criteria: companies in the non-financial sector. This study finds that company size and financial health affect the reduction in carbon emissions that a company generates from its operations. This study also finds that the profitability and size of Indonesian manufacturing companies impact efforts to reduce carbon emissions which are shown in the disclosure of carbon emission reduction activities. However, the level of debt owned by companies does not have a significant impact on efforts to control carbon emissions. This finding implies that large and financially sound companies tend to maintain and reduce the carbon emissions they generate from their operational activities as a form of their responsibility to their stakeholders in a broad view.