Main Article Content
Environmental Performance, Environmental Disclosure, Legitimacy, High Profile Industry
Purpose of this study: This study examines the relationship between environmental performance and the extent of environmental disclosure.
Methodology: The sample of this study consists of 35 high profile companies. The environmental performance is measured based on the results of the assessment of PROPER and the extent of environmental disclosure index by using GRI checklist items. This research applies content analysis, descriptive, and inferential statistical analyses.
Main Findings: The result shows that the extent of environmental disclosure, on an average is low (22.5%). Mining companies provide the highest environmental disclosure (58.2%) followed by chemicals (21.4%), utilities (19.0%), pulp and papers (16.5%), industrial (11.0%), and oil and gas (4.2%). The analysis also presents that environmental performance does not affect the level of environmental disclosure.
Implications: This result suggests that high environmental performance may not encourage companies to communicate more environmental issues. This finding indicates that motivation for a company to disclose environmental information is not always based on the legitimacy perspectives, but might be an accountability form.
2. Bloomberg, L. P. 2018. Financial Analysis for Companies Indexed on JCI Index in 1/1 2016 to 31/12 2016: Bloomberg Database.
3. Campopiano, G., and A. D. Massis. 2015. Corporate Social Responsibility Reporting: A Content Analysis in Family and Non-family Firms. Journal of Business Ethics, 129(3), 511-534. https://doi.org/10.1007/s10551-014-2174-z
4. Cho, C. H., and D. M. Patten. 2007. The Role of Environmental Disclosures as Tools of Legitimacy: A Research Note. Accounting, Organizations and Society, 32(7-8), 639-647. ttps://doi.org/10.1016/j.aos.2006.09.009
5. Clarkson, M. B. E. 1995. A Stakeholder Framework for Analyzing and Evaluating Corporate Social Performance. The Academy of Management Review, 20(1), 92-117. https://doi.org/10.5465/amr.1995.9503271994
6. Clarkson, P. M., X. Fang, Y. Li, and G. Richardson. 2013. The Relevance of Environmental Disclosures: Are Such Disclosures Incrementally Informative? J. Account. Public Policy, 32, 32, 410 - 431. https://doi.org/10.1016/j.jaccpubpol.2013.06.008
7. Clarkson, P. M., Y. Li, G. D. Richardson, and F. P. Vasvari. 2008. Revisiting the Relation between Environmental Performance and Environmental Disclosure: an Empirical Analysis. Accounting, Organizations and Society, 33 (4-5), 303-327. https://doi.org/10.1016/j.aos.2007.05.003
8. Clarkson, P. M., Y. Li, G. D. Richardson, and F. P. Vasvari. 2011. Does it really pay to be green? Determinants and consequences of proactive environmental strategies. Journal of Accounting and Public Policy, 30 (2), 122-144. https://doi.org/10.1016/j.jaccpubpol.2010.09.013
9. Cormier, D. and M. Magnan. 1999. Corporate Environmental Disclosure Strategies: Determinants, Costs and Benefits. Journal of Accounting, Auditing & Finance, 14 (4), 429-451. https://doi.org/10.1177/0148558X9901400403
10. Cormier, D., M. Magnan, and B. Morard. 1993. The Impact of Corporate Pollution on Market Valuation: Some Empirical Evidence. Ecological Economics, 8, 135-155. https://doi.org/10.1016/0921-8009(93)90041-4
11. Cowen, S., L. B. Ferreri, and L. D.Parker. 1987. The Impact of Corporate Characteristics on Social Responsibility Disclosure: A Typology and Frequency-Based Analysis. Accounting, Organization, and Society, 12 (2), 111-122.
12. Deegan, C. 2007. Financial Accounting Theory. 2 ed. Australia: McGraw - Hill Irwin. https://doi.org/10.1016/0361-3682(87)90001-8
13. Faisal, F. and T. Achmad. 2014. Internal Contextual Factors Influencing the Extent of Environmental Disclosure. International Journal of Managerial and Financial Accounting, 6 (4), 357-374. https://doi.org/10.1504/IJMFA.2014.066404
14. Fauzi, H. 2014. The Indonesian Executives Perspective of CSR Practices. Issues in Social and Environmental Accounting, 8 (3), 171 - 181. https://doi.org/10.22164/isea.v8i3.92
15. Goodman, L. A. and W. H. Kruskal. 1979. Measures of Association for Cross Classifications. edited by D. Brillinger, S. Fienberg, J. Gani, J. Hartigan, J. Kiefer; and K. Krickeberg. Vol. 1. New York: Springer-Verlag.
16. GRI. 2013. Global Reporting Initiave.: Reporting Principles an Standar Disclosures.
17. GRI. 2015. G4 Part1 Reporting Principles and Standard Disclosures Amsterdam.
18. Gunawan, J. 2007. Corporate Social Disclosures by Indonesian Listed Companies: A Pilot Study. Social Responsibility Journal, 3 (3), 26-34. https://doi.org/10.1108/17471110710835554
19. Hackston, D. and Markus J. Milne. 1996. Some Determinants of Social and Environmental Disclosures in New Zealand Companies. Accounting, Auditing & Accountability Journal, 9 (1), 77 - 108. https://doi.org/10.1108/09513579610109987
20. Hasseldine, J., A. I. Salama, and J. S. Toms. 2005. Quantity Versus Quality: The Impact of Environmental Disclosures on The Reputations of UK Plcs. The British Accounting Review, 37, 231-248. https://doi.org/10.1016/j.bar.2004.10.003
21. Hermawan, M. S. and S. G. Mulyawan. 2014. Profitability and CSR: An Analysis of Indonesia’s Listed Company. Asia Pasific Journal of Accounting and Finance, 3 (1), 15-31.
22. Hughes, I. 2000. The Value Relevance of Non Financial Measures of Air Pollution in the Electric Utility Industry. The Accounting Review, 75 (2), 209-228. https://doi.org/10.2308/accr.2000.75.2.209
23. Ika, S. R., T. Dwiwinarno, and A. K. Widagdo. 2017. Corporate Social Responsibility and Corporate Governance in Indonesian Public Companies. SHS Web of Conferences, 34 (-), 1-11. https://doi.org/10.1051/shsconf/20173413002
24. Ingram, R. W. and K. B. Frazier. 1980. Environmental Performance and Corporate Disclosure. Journal of Accounting Research, 18 (2), 614 - 622. https://doi.org/10.2307/2490597
25. Ketaren, M. M. 2014. Strengthening the Corporate Social Responsibility Regime in Indonesia. International Journal of Humanities and Social Science, 4 (9 (1)), 92-100.
26. Laan, S. V. D. 2009. The Role of Theory in Explaining Motivation for Corporate Social Disclosures: Voluntary Disclosures vs ‘Solicited’ Disclosures. Journal of Accounting & Organizational Change, 3 (4).
27. Laine, M. 2009. Ensuring Legitimacy Through Retorical Changes? A Longitudinal Interpretation of the Environmental Disclosures of a Leading Finnish Chemical Company. Accounting, Auditing and Accountability Journal, 22 (7), 1029-1054. https://doi.org/10.1108/09513570910987367
28. Mirfazli, E. 2008. Evaluate Corporate Social Responsibility Disclosure at Annual Report Companies in Multifarious Group of Industry Members of Jakarta Stock Exchange (JSX), Indonesia. Social Responsibility Journal, 4 (3), 388 - 406. https://doi.org/10.1108/17471110810892884
29. Neu, D., H. Warsame, and K. Pedwell. 1998. Managing Public Impressions: Environmental Disclosures in Annual Reports. Accounting Organizations and Society, 23 (3), 265 - 282. https://doi.org/10.1016/S0361-3682(97)00008-1
30. Patten, D. M. 1991. Exposure, Legitimacy, and Social Disclosure. Journal of Accounting and Public Policy, 10, 297-308. https://doi.org/10.1016/0278-4254(91)90003-3
31. Patten, D. M. 1992. Intra-Industry Environmental Disclosures in Response to The Alaskan Oil Spill: A Note on Legitimacy Theory. Accounting Organtzatlons and Society, 17 (5), 471-475. https://doi.org/10.1016/0361-3682(92)90042-Q
32. Patten, D. M. 2002. The Relation between Environmental Performance and Environmental Disclosure: a Research Note. Accounting, Organizations and Society, 27, 763 - 773. https://doi.org/10.1016/S0361-3682(02)00028-4
33. Patten, D. M. 2005. The Accuracy of Financial Report Projections of Future Environmental Capital Expenditures: a Research Note. Accounting, Organizations and Society, 30, 457 - 468. https://doi.org/10.1016/j.aos.2004.06.001
34. Plumlee, M., D. Brown, R. M. Hayes, and R. S. Marshall. 2015. Voluntary Environmental Disclosure Quality and Firm Value: Further Evidence. J. Account. Public Policy xxx–xxx, xxx 1-26. https://doi.org/10.1016/j.jaccpubpol.2015.04.004
35. PROPER. 2015. Proper Report 2015: Program Rating of Company Performance in Environmental Management. Jakarta: PROPER Secretariat Office of Environment and Forestry Ministry
36. PROPER. 2016. Proper Report 2016: Program Rating of Company Performance in Environmental Management. Jakarta: PROPER Secretariat Office of Environment & Forestry Ministry
37. Schaltegger, S. 1997. Information Costs, Quality of Information and Stakeholder Involvement - The Necessity of International Standards, of Ecological Accounting. Eco - management and Auditing, 4, 87 - 97. https://doi.org/10.1002/(SICI)1099-0925(199711)4:3<87::AID-EMA70>3.0.CO;2-Z
38. Setiawan, M. and Darmawan. 2011. The Relationship between Corporate Social Responsibility and Firm Financial Performance: Evidence from the Firms Listed in LQ45 of the Indonesian Stock Exchange Market. European Journal of Social Sciences, 23 (2), 288-293.
39. Sharma, B. 2013. Contextualising CSR in Asia: Corporate Social Responsibility in Asian Economies. Singapore: the Lien Centre for Social Innovation
40. Staden, C. J. V. and J. Hooks. 2007. A Comprehensive Comparison of Corporate Environmental Reporting and Responsiveness. The British Accounting Review, 39 (3), 197-210. https://doi.org/10.1016/j.bar.2007.05.004
41. Sutantoputra, A. W., M. Lindorff, and E. P. Johnson. 2012. The Relationship between Environmental Performance and Environmental Disclosure. Australasian Journal of Environmental Management, 19 (1), 51-65. https://doi.org/10.1080/14486563.2011.646752
42. Tan, A., D. Benni, and W. Liani. 2016. Determinants of Corporate Social Responsibility Disclosure and Investor Reaction. International Journal of Economics and Financial Issues, 6 (54), 11-17.
43. Tilt, C. A. 1994. The Influence of External Pressure Groups on Corporate Social Disclosure Some Empirical Evidence. Accounting, Auditing & Accountability Journal, 7 (4), 47 - 72. https://doi.org/10.1108/09513579410069849
44. Trireksani, T. and H. G. Djajadikerta. 2016. Corporate Governance and Environmental Disclosure in the Indonesian Mining Industry. Australasian Accounting, Business and Finance Journal, 10 (1), 18-28. https://doi.org/10.14453/aabfj.v10i1.3
45. Waris, A., F. J. George, and M. Zeeshan. 2017. Determinants of Corporate Social Responsibility (CSR) Disclosure in Developed and Developing Countries: A Literature Review. Corporate Social Responsibility and Environmental Management, 24 (4), 273-294. https://doi.org/10.1002/csr.1410
46. Woodward, D. G., P. Edwards, and F. Birkin. 1996. Organizational Legitimacy and Stakeholder Information Provision. British Journal of Management, 7, 329 - 347. https://doi.org/10.1111/j.1467-8551.1996.tb00123.x