The Impact of Financial, Non-Financial, and Corporate Governance Attributes on the Practice of Global Reporting Initiative (GRI) Based Environmental Disclosure

Gadjah Mada International Journal of Business Vol. 13, No. 2, pp. 143-159, May-August 2011

16 Pages Posted: 15 Nov 2012

See all articles by Frendy

Frendy

Nagoya University of Commerce and Business

Indra Kusuma

Universitas Gadjah Mada (UGM)

Date Written: July 30, 2011

Abstract

Business entities are able to exert their influence on particular stakeholders for the benefit of their interest by managing the information they disseminate to the public, particularly if there is no regulation on such issue in place. Accordingly, the extent of accounting information disclosed to the public, specifically voluntary environmental information, is determined by the internal characteristics of the business entities. The objective of this research is to test the financial, non-financial, and corporate governance attributes of Indonesian public companies which contribute to the extent of environmental information disclosure in Indonesia.

This research measured the extent of Indonesian public companies’ environmental disclosure using Environmental Disclosure Index (EDI) as a dependent variable. The index is developed from the parameters under environmental protocols of the Global Reporting Initiative (GRI) G3 framework. Samples of 35 Indonesian public companies are purposively chosen for each of the year from 2005-2008 to form a total of 140 observations.

The testing results conclude that size of company, economic performance, and industry sensitivity positively affect environmental disclosure. This research is limited by an assumption that Indonesian public companies employ annual report as the primary means to publicize financial and non-financial information to public.

Keywords: annual report, corporate governance, environmental disclosure, global reporting initiative, Indonesia

JEL Classification: M41, G34

Suggested Citation

, Frendy and Kusuma, Indra, The Impact of Financial, Non-Financial, and Corporate Governance Attributes on the Practice of Global Reporting Initiative (GRI) Based Environmental Disclosure (July 30, 2011). Gadjah Mada International Journal of Business Vol. 13, No. 2, pp. 143-159, May-August 2011, Available at SSRN: https://ssrn.com/abstract=2175421

Frendy (Contact Author)

Nagoya University of Commerce and Business ( email )

4-4 Sagamine, Komenoki
Nisshin, 470-0193
Japan

Indra Kusuma

Universitas Gadjah Mada (UGM) ( email )

Bulaksumur, Yogyakarta
Yogyakarta, Special Province of Yogyakarta
Indonesia

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