Factors influencing environment disclosure quality and the moderating role of corporate governance

• Main Authors: Badingatus Solikhah, Ukhti Maulina
• Format: Article
• Language: English
• Published: Taylor & Francis Group 2021-01-01
• Series: Cogent Business & Management
• Subjects: media coverage; environmental award; financial performance; corporate governance; quality of environmental disclosure; moderating effect
• Online Access: http://dx.doi.org/10.1080/23311975.2021.1876543

This present study aims to investigate the quality and scope of environmental disclosure (ED) in environmentally sensitive manufactures. It also analyzes the effect of media coverage, environmental award, and financial performance on the quality of environmental disclosure and the extent to which the implementation of corporate governance (CG) principles in moderating these factors. This study used 135 manufacturing companies listed in the Indonesian Stock Exchange during 2012–2016. Partial least squares–structural equation modeling (PLS-SEM) has been employed to test the research hypothesis. The results point out that media coverage and awards associated with the quality of environmental disclosure. The media coverage and environmental awards can improve the quality of environmental disclosure and the correlation will increase if the company pays attention to the implementation of CG principles. This finding supports a comprehensive view of corporate governance which includes disclosure. Empirical findings indicate that external pressures such as media coverage and competitions lead to an appreciation that can increase voluntary environmental disclosure, therefore highlighting the central role of community engagement, media, and non-governmental organizations. Government supervision is important in ensuring the implementation of environmental disclosure that aligns with applicable regulations.