The purpose of this study is to examine the relationship between the disclosure of waste information and the firm value in Indonesian’s PROPER participant companies listed in Indonesia stock exchange. The waste information is examined by expanding waste components more specifically that is gas emission, solid waste, and liquid waste (effluent). The firm value is examined from an economic perspective by using the stock price. This research uses modified Ohlson valuation model with regression of panel data to analyze the PROPER participant companies listed in the Indonesia Stock Exchange during the years 2016-2018. To identify the waste information disclosure, this paper develops the quantified measurement based on content analysis from the company’s Annual Report adopted from prior research. Consistent with the signaling theory, this research empirically generates findings that the disclosure of gas emission, solid waste, and effluent by the company, either together or separately, have a positive relationship towards the price of the company's stock. This shows that the market gives a positive reaction to companies that voluntarily disclose their waste information, so the waste information disclosure considered to be a "good news" for the company in the capital market.
Achmad, T., Faisal, F., & Oktarina, M. (2017). Factors Influencing Voluntary Corporate Risk Disclosure Practices By Indonesian Companies. Corporate Ownership & Control, 14(14), 3–2. https://doi.org/10.22495/cocv14i3c2art2
Ahmad, N. N. N., & Hossain, D. M. (2015). Climate Change and Global Warming Discourses and Disclosures in the Corporate Annual Reports: A Study on the Malaysian Companies. Procedia - Social and Behavioral Sciences, 172, 246–253. https://doi.org/10.1016/j.sbspro.2015.01.361
Al-Tuwaijri, S. A., Christensen, T. E., & Hughes, K. E. (2004). The Relations among Environmental Disclosure, Environmental Performance, and Economic Performance: A Simultaneous Equations Approach. Accounting, Organizations and Society, 29(5–6), 447–471.
https://doi.org/10.1016/S0361-3682(03)00032-1
Anggraeni, D. Y. (2015). Pengungkapan Emisi Gas Rumah Kaca, Kinerja Lingkungan, Dan Nilai Perusahaan. Jurnal Akuntansi Dan Keuangan Indonesia, 12(2), 1–18.
Bai, R., & Sutanto, M. (2002). The Practice and Challenges of Solid Waste Management in Singapore. Journal of Environmental Protection, 22(5), 557–567. https://doi.org/10.1016/S0956-053X(02)00014-4
Bank Indonesia. (2013). Surat Edaran No. 15/28/DPNP. Retrieved from
http://www.bi.go.id/id/peraturan/perbankan/Documents/2fab623089e2421284b14cded4ecf54fSEBINo15_28_DPNP.pdf
Barth, M. E., Beaver, W. H., & Landsman, W. R. (2001). The Relevance of The Value Relevance Literature for Financial Accounting Standard Setting: Another View. Journal of Accounting and Economics, 31(September), 77–104. https://doi.org/10.1016/S0165-4101(01)00019-2
Broadstock, D. C., Collins, A., Hunt, L. C., & Vergos, K. (2016). Voluntary disclosure, greenhouse gas emissions and business performance: Assessing the first decade of reporting. British Accounting Review. https://doi.org/10.1016/j.bar.2017.02.002
Burritt, R. L., & Christ, K. L. (2018). Water risk in mining: Analysis of the Samarco dam failure. Journal of Cleaner Production, 178, 196–205. https://doi.org/10.1016/j.jclepro.2018.01.042
Choi, B. B., Lee, D., & Psaros, J. (2013). An analysis of Australian company carbon emission disclosures. Pacific Accounting Review, 25(1), 58–79. https://doi.org/10.1108/01140581311318968
Clarkson, P. M., Li, Y., Richardson, G. D., & Vasvari, F. P. (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
Clarkson, P. M., Li, Y., Richardson, G. D., & Vasvari, F. P. (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
Clarkson, P. M., Overell, M. B., & Chapple, L. (2011). Environmental Reporting and its Relation to Corporate Environmental Performance. Abacus, 47(1), 27–60. https://doi.org/10.1111/j.1467-6281.2011.00330.x
Cormier, D., Magnan, M., & Van Velthoven, B. (2005). Environmental disclosure quality in large German companies: Economic incentives, public pressures or institutional conditions? European Accounting Review, 14(1), 3–39. https://doi.org/10.1080/0963818042000339617
Cowan, S., & Deegan, C. (2011). Corporate disclosure reactions to Australia’s first national emission reporting scheme. Accounting and Finance, 51(2), 409–436. https://doi.org/10.1111/j.1467-629X.2010.00361.x
Da Rosa, F. S., Guesser, T., Hein, N., Pfitscher, E. D., & Lunkes, R. J. (2015). Environmental impact management of Brazilian companies: Analyzing factors that influence disclosure of waste, emissions, effluents, and other impacts. Journal of Cleaner Production, 96, 148–160. https://doi.org/10.1016/j.jclepro.2013.10.035
Dhaliwal, D. S., Li, O. Z., Tsang, A., & Yang, Y. G. (2011). Voluntary nonfinancial disclosure and the cost of equity capital: The initiation of corporate social responsibility reporting. Accounting Review, 86(1), 59–100. https://doi.org/10.2308/accr.00000005
Direktorat Jenderal Pengendalian Perubahan Iklim Kementerian Lingkungan Hidup dan Kehutanan. (2016). Perubahan Iklim, Perjanjian Paris dan Nationally Determined Contribution. Retrieved from ditjenppi.menlhk.go.id
Djajadikerta, H. G., & Trireksani, T. (2012). Corporate social and environmental disclosure by Indonesian listed companies on their corporate web sites. Journal of Applied Accounting Research, 13(1), 21–36. https://doi.org/10.1108/09675421211231899
Downe-Wambolt, B. (2009). Content analysis?: Method , applications , and issues. Health Care for Women International, 13(3), 313–321. https://doi.org/10.1080/07399339209516006
Elo, S., & Kyngas, H. (2008). The Qualitative Content Analysis Process. Journal of Advanced Nursing, 62(1), 107–115. https://doi.org/10.1111/j.1365-2648.2007.04569.x
García, J. H., Afsah, S., & Sterner, T. (2009). Which firms are more sensitive to public disclosure schemes for pollution control? Evidence from Indonesia’s PROPER program. Environmental and Resource Economics, 42(2), 151–168. https://doi.org/10.1007/s10640-008-9211-2
Griffin, P. A., & Sun, Y. (2013). Going Green: Market Reaction to CSRWire News Releases. Journal of Accounting and Public Policy, 32(2), 93–113. https://doi.org/10.1016/j.jaccpubpol.2013.02.002
Gunawan, J., Djajadikerta, H., & Smith, M. (2009). An examination of corporate social disclosures in the annual reports of Indonesia listed companies. Asia Pacific Centre for Environmental Accountability Journal, 15(1), 13–36.
Hayes, A. F., & Cai, L. (2007). Using heteroskedasticity-consistent standard error estimators in OLS regression?: An introduction and software implementation. Behaviour Research Methods, 39(4), 709–722.
Healy, P. M., & Palepu, K. G. (2001). Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature. Journal of Accounting and Economics, 31(1–3), 405–440. https://doi.org/10.1016/S0165-4101(01)00018-0
Hong, J., Chen, Y., Wang, M., Ye, L., Qi, C., Yuan, H., … Li, X. (2017). Intensification of municipal solid waste disposal in China. Renewable and Sustainable Energy Reviews, 69(April 2016), 168–176. https://doi.org/10.1016/j.rser.2016.11.185
Huang, R., & Chen, D. (2015). Does Environmental Information Disclosure Benefit Waste Discharge Reduction? Evidence from China. Journal of Business Ethics, 129(3), 535–552.
https://doi.org/10.1007/s10551-014-2173-0
Ingram, R. W., & Frazier, K. B. (1980). Environmental Performance and Corporate Disclosure. Journal of Accounting Research, 18(2), 614–622. https://doi.org/10.2307/2490597
International Organization for Standardization. (2013). INTERNATIONAL STANDARD Environmental management — Environmental performance evaluation — Guidelines (ISO 14031). Switzerland.
Jaffe, A. B., & Palmer, K. (1997). Environmental regulation and innovation: A panel data study. Review of Economics & Statistics, 79(4), 610–619. https://doi.org/10.1162/003465397557196
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.
https://doi.org/10.1016/0304-405X(76)90026-X
Jiang, T., & Mckibbin, W. J. (2002). Assessment of China â€TM s Pollution Levy System?: An Equilibrium Pollution Approach. Environment and Development Development Economics, 7(1), 75–105. https://doi.org/10.1017/S1355770X02000050
Kadirvelu, K., Thamaraiselvi, K., & Namasivayam, C. (2001). Removal of heavy metals from industrial wastewaters by adsorption onto activated carbon prepared from an agricultural solid waste. Bioresource Technology, 76, 63–65.
Kaihatu, T. S. (2006). Good corporate governance dan penerapannya di Indonesia. Jurnal Manajemen Dan Kewirausahaan, 8(1), pp.1-9. https://doi.org/10.9744/jmk.8.1.pp. 1-9
Klerk, M. de, & Villiers, C. de. (2012). The Value Relevance Of Corporate Responsibility Reporting: South African Evidence. Meditari Accountancy Research, 20(1), 21–38. https://doi.org/10.1108/10222521211234200
Konar, S., & Cohen, M. A. (2001). Does The Market Value Environmental Performance? The Review of Economics and Statistics, 83(May), 281–289.
Krishnamurti, C., & Velayutham, E. (2017). The Influence of Board Committee Structures on Voluntary Disclosure of Greenhouse Gas Emissions: Australian Evidence. Pacific-Basin Finance Journal, (September). https://doi.org/10.1016/j.pacfin.2017.09.003
Luo, L., & Tang, Q. (2014). Does voluntary carbon disclosure reflect underlying carbon performance? Journal of Contemporary Accounting and Economics, 10(3), 191–205. https://doi.org/10.1016/j.jcae.2014.08.003
Matsumura, E. M., Prakash, R., & Vera-Munoz, S. C. (2014). Firm-Value Effects of Carbon Emissions and Carbon Disclosures. The Accounting Review, 89(2), 695–724. https://doi.org/10.2308/accr-50629
Miller, J. N. (1993). Tutorial Review: Outliers in Experimental Data and Their Treatment. Analyst, 118(May), 455–461.
Nor, N. M., Bahari, N. A. S., Adnan, N. A., Kamal, S. M. Q. A. S., & Ali, I. M. (2016). The Effects of Environmental Disclosure on Financial Performance in Malaysia. Procedia Economics and Finance, 35(October 2015), 117–126. https://doi.org/10.1016/S2212-5671(16)00016-2
Ohlson, J. (1995). Earnings, book-values, and dividends in equity valuation. Contemporary Accounting Research, 11(2), 661–687. https://doi.org/10.1111/j.1911-3846.1995.tb00461.x
Otoritas Jasa Keuangan Republik Indonesia. (2015). Peraturan Otoritas Jasa Keuangan Republik Indonesia Nomor 21/POJK.04/2015 Tentang Penerapan Pedoman Tata Kelola Perusahaan Terbuka. 1–29. Retrieved from http://www.ojk.go.id/id/kanal/iknb/regulasi/lembaga-keuangan-mikro/peraturan-ojk/Documents/SAL-POJK PERIZINAN FINAL F.pdf
Otoritas Jasa Keuangan Republik Indonesia. (2016). Peraturan Otoritas Jasa Keuangan Republik Indonesia Nomor 29/POJK.04/2016 Tentang Laporan Tahunan Emiten atau Perusahaan Publik. 1–29. Retrieved from www.ojk.go.id
Patten, D. M. (2002). The relation between environmental performance and environmental disclosure: A research note. Accounting, Organizations and Society, 27(8), 763–773. https://doi.org/10.1016/S0361-3682(02)00028-4
Percy, M. (2000). Financial reporting discretion and voluntary disclosure?: Corporate research and development expenditure in Australia. Asia-Pacific Journal of Accounting & Economics, 7, 1–31. https://doi.org/10.1080/16081625.2000.10510572
Plumlee, M., Brown, D., Hayes, R. M., & Marshall, R. S. (2015). Voluntary environmental disclosure quality and firm value: Further evidence. Journal of Accounting and.
https://doi.org/10.1016/j.jaccpubpol.2015.04.004
Qian, W., & Schaltegger, S. (2017). Revisiting carbon disclosure and performance: Legitimacy and management views. British Accounting Review, 49(4), 365–379.
https://doi.org/10.1016/j.bar.2017.05.005
Rahman, N. R. A., Rasid, S. Z. A., & Basiruddin, R. (2014). Exploring the Relationship between Carbon Performance, Carbon Reporting and Firm Performance: A Conceptual Paper. Procedia - Social and Behavioral Sciences, 164(August), 118–125. https://doi.org/10.1016/j.sbspro.2014.11.059
Rahman, S. A. A., Yusoff, R., & Mohamed, W. N. W. (2009). Environmental disclosure and financial performance: An empirical study of Malaysia, Thailand and Singapore. Social and Environmental Accountability Journal, 29(December 2014), 46–58.
https://doi.org/10.1080/0969160X.2009.9651811
Republik Indonesia. (2014). PP Nomor 101 Tahun 2014 Tentang Pengelolaan limbah berbahaya dan beracun. 1–233. https://doi.org/10.1007/s13398-014-0173-7.2
Sarumpaet, S. (2005). The Relationship Between Environmental Performance and Financial Performance of Indonesian. Jurnal Akuntansi & Keuangan, 7(2), 89–98.
Stanny, E., & Ely, K. (2008). Corporate Environmental Disclosure about the Effects of Climate Change. Corporate Social Responsibility and Environmental Management, 15(October), 338–348. https://doi.org/10.1002/csr.175
Tauringana, V., & Chithambo, L. (2015). The effect of DEFRA guidance on greenhouse gas disclosure. British Accounting Review, 47(4), 425–444. https://doi.org/10.1016/j.bar.2014.07.002
Taweesan, A., Koottatep, T., & Polprasert, C. (2016). Effective Measures for Municipal Solid Waste Management for Cities in Some Asian Countries. Exposure and Health, 1–9. https://doi.org/10.1007/s12403-016-0227-5
Taylor, P., Guarte, J. M., & Barrios, E. B. (2006). Estimation Under Purposive Sampling. Communications in Statistics - Simulation and Computation, 35(February 2014), 37–41. https://doi.org/10.1080/03610910600591610
Trireksani, T., & Djajadikerta, H. G. (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
Van den Hove, S., Menestrel, M. le, & Bettignies, H.-C. de. (2002). The oil industry and climate change: strategies and ethical dilemmas. Climate Policy, 2(1), 3–18.
https://doi.org/10.3763/cpol.2002.0202
Villiers, C. de, & Van Staden, C. J. (2010). Shareholders’ requirements for corporate environmental disclosures: A cross country comparison. British Accounting Review, 42(4), 227–240. https://doi.org/10.1016/j.bar.2010.08.002
Walden, W. D., & Schwartz, B. N. (1997). Environmental Disclosures and Public Policy Pressure. Journal of Accounting and Public Policy, 16(2), 125–154. https://doi.org/10.1016/S0278-4254(96)00015-4
Wang, H., Bi, J., Wheeler, D., Wang, J., Cao, D., Lu, G., & Wang, Y. (2004). Environmental performance rating and disclosure: China’s GreenWatch program. Journal of Environmental Management, 71(2), 123–133. https://doi.org/10.1016/j.jenvman.2004.01.007
Wang, M. C. (2015). The relationship between environmental information disclosure and firm valuation: the role of corporate governance. Quality and Quantity, 1135–1151. https://doi.org/10.1007/s11135-015-0194-0
Wang, M., & Hussainey, K. (2013). Voluntary forward-looking statements driven by corporate governance and their value relevance. Journal of Accounting and Public Policy, 32(3), 26–49. https://doi.org/10.1016/j.jaccpubpol.2013.02.009
Watson, M., & MacKay, J. (2003). Auditing for the environment. Managerial Auditing Journal, 18(8), 625–630. https://doi.org/10.1108/02686900310495115
White, H. (1980). A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity. Econometrica, 48(4), 817–838.
Wiseman, J. (1982). An evaluation of environmental disclosures made in corporate annual reports. Accounting, Organizations and Society, 7(1), 53–63. https://doi.org/10.1016/0361-
3682(82)90025-3
Zainu, Z., & Songip, A. (2017). Policies, challenges and strategies for Municipal waste management in Malaysia. Journal of Science, Technology and Innovation, 3(1), 18–22. Retrieved from http://www.jostip.org/index.php/jostip/article/view/47
Ziegler, A., Busch, T., & Hoffmann, V. H. (2011). Disclosed corporate responses to climate change and stock performance?: An international empirical analysis. Energy Economics, 33(6), 1283–1294. https://doi.org/10.1016/j.eneco.2011.03.007
In-Text Citation: (Julansa et al., 2020)
To Cite this Article: Julansa, H., Zuraida, & Diantimala, Y. (2020). The Effect of Gas Emission Disclosure, Solid Waste Disclosure, and Effluent Disclosure on Firm Value. International Journal of Academic Research in Business and Social Sciences, 10(6), 421–448.
Copyright: © 2020 The Author(s)
Published by Knowledge Words Publications (www.kwpublications.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode