Climate Change Disclosure Impact on Indonesian Corporate Financial Performance

Iriyadi Iriyadi, Yovita Antonio


This paper aims to observe the impact of climate change disclosure (CCD) towards corporate financial performance (CFP) proxied by returns on assets (ROA), return on sales (ROS), and sales growth. Linear and non-linear approaches are employed for this research. Recommendation from Task Force on Climate-Related Financial Disclosures (TCFD) are applied for content analysis to obtain CCD scores. The target population in this study is 45 best performing companies (LQ45) listed on the Indonesia Stock Exchange (IDX) that disclosed sustainability report from 2014 to 2018. The number of observations is 72 year-companies. The findings show that CCD in large companies decreases ROS and improves ROA, yet in general, the improvement occurs in the long term for ROA and sales growth after a certain level is met (U-curve). In general, providing climate-related information will eventually pay. Financial improvement of the companies has increased despite of low quality of CCD and an indication of positive customer reaction to CCD is noticeable.


Climate change disclosure; financial performance; TCFD recommendations; return on assets; Sales growth

Full Text:



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.

Akhiroh, T., & Kiswanto. (2016). The determinant of carbon emission disclosures. Accounting Analysis Journal, 5, 326–336.

Anggraeni, D. Y. (2015). Pengungkapan emisi gas rumah kaca, kinerja lingkungan, dan nilai perusahaan. Jurnal Akuntansi Dan Keuangan Indonesia, 12(2), 188–209.

Bouten, L., Everaert, P., Van Liedekerke, L., De Moor, L., & Christiaens, J. (2011). Corporate social responsibility reporting: a comprehensive picture? Accounting Forum, 35(3), 187–204.

Broadstock, D. C., Collins, A., Hunt, L. C., & Vergos, K. (2018). Voluntary disclosure, greenhouse gas emissions and business performance: Assessing the first decade of reporting. The British Accounting Review, 50(1), 48–59.

Cahya, B. T. (2016). Carbon emission disclosure: ditinjau dari media exposure, kinerja lingkungan dan karakteristik perusahaan go public berbasis syariah di indonesia. NIZHAM, 5(2), 170–188.

CDP. (2019). Major Risk or Rosy Opportunity: Are companies ready for climate change?

Cho, C. (2009). Legitimation strategies used in response to environmental disaster: a french case study of total sa’s erika and azf incidents. European Accounting Review, 18, 33–62.

Choi, B. B., Lee, D., & Psaros, J. (2013). An analysis of Australian company carbon emission disclosures. Pacific Accounting Review, 25(1), 58–79.

Daromes, & Monica. (2020). Women on boards and greenhouse gas emission disclosures: how their impact on corporate reputation.

Delmas, M. A., & Nairn-Birch, N. S. (2011). ). Is the tail wagging the dog? an empirical analysis of corporate carbon footprints and financial performance. ucla: institute of the environment and sustainability.

Deloitte. (2020). The deloitte global millennial survey 2020: resilient generations hold the key to creating a “better normal.”

DiSalvio, & Dorata. (2014). Sec guidance on climate change risk disclosures: an assessment of firm and market responses. in: freedman m, jaggi b (ed) accounting for the environment: more talk and little progress. emerald, bingley,. Emerald, Bingley, 115–130.

Eccles, R. G., & Krzus, M. P. (2019). Implementing the task force on climate-related financial disclosures recommendations: an assessment of corporate readiness. Schmalenbach Business Review, 71(2), 287–293.

Eleftheriadis, I., Anagnostopoulou, E., & Diavastis, I. E. (2012). Relationship between financial performance and corporate disclosures regarding climate change practices, (february 2016).

Fujii, H., Iwata, K., Kaneko, S., & Managi, S. (2013). Corporate environmental and economic performance of japanese manufacturing firms: empirical study for sustainable development. Business Strategy and the Environment, 22(3), 187–201.

Ganda, F., & Milondzo, K. S. (2018). The impact of carbon emissions on corporate financial performance: evidence from the south african firms.

Gnanaweera, K., & Kunori, N. (2018). Corporate sustainability reporting: linkage of corporate disclosure information and performance indicators. Cogent Business & Management, 5.

Hahn, R., & Kühnen, M. (2013). Determinants of sustainability reporting: a review of results, trends, theory, and opportunities in an expanding field of research. Journal of Cleaner Production, 59, 5–21.

Hanifah, F. F. (2017). The effect of political competition , hdi , and leverage on the availability and accessibility of local financial information on the website. Accounting Analysis Journal, 6(2252–6765), 242–252.

Hrasky, S. (2011). Carbon footprints and legitimation strategies: Symbolism or action? Accounting, Auditing & Accountability Journal, 25, 174–198.

Ilhan, E., Krueger, P., Sautner, Z., & Starks, L. T. (2020). Institutional investors’ views and preferences on climate risk disclosure. Swiss Finance Institute Research, 19-66

Ilinitch, A. Y., Soderstrom, N. S., & E. Thomas, T. (1998). Measuring corporate environmental performance. Journal of Accounting and Public Policy, 17(4), 383–408.

Irwhantoko, I., & Basuki, B. (2016). Carbon Emission Disclosure: Studi pada Perusahaan Manufaktur Indonesia. Jurnal Akuntansi Dan Keuangan, 18(2), 92–104.

Islam, M. A. (2009). Environmental Incidents in a Developing Country and Corporate Environmental Disclosures: a Study of a Multinational Gas Company. Society and Business Review.

Iwata, H., & Okada, K. (2011). How does environmental performance affect financial performance? Evidence from Japanese manufacturing firms. Ecological Economics, 70.

Jannah, R. (2014). Analisis Faktor-faktor yang Mempengaruhi Carbon Emission Disclosure pada Perusahaan di Indonesia (Studi Empiris pada Perusahaan yang Terdaftar di BEI Periode 2010-2012).

Kelvin, C., Daromes, F., & Ng, S. (2017). Pengungkapan emisi karbon sebagai mekanisme peningkatan kinerja untuk menciptakan nilai perusahaan, 1–18.

Kolk, A., Levy, D., & Pinkse, J. (2008). Corporate Responses in an Emerging Climate Regime: The Institutionalization and Commensuration of Carbon Disclosure. European Accounting Review, 17(4), 719–745.

Lash, J., & Wellington, F. (2007). Competitive Advantage on a Warming Planet.

Leitoniene, S., & Sapkauskiene, A. (2015). Quality of Corporate Social Responsibility Information. Procedia - Social and Behavioral Sciences, 213, 334–339.

Lewandowski, S. (2015). Carbon Emissions and Corporate Financial Performance: A Systematic Literature Review and Options for Methodological Enhancements (pp. 193–215).

Lim, S., Wilmshurst, T., & Shimeld, S. (2010). Blowing in the wind - legitimacy theory, an environmental incident and disclosure.

Nasih, M., Harymawan, I., Paramitasari, Y. I., & Handayani, A. (2019). Carbon emissions, firm size, and corporate governance structure: evidence from the mining and agricultural industries in Indonesia. Sustainability MDPI, 11(9), 1–14.

Nurdiawansyah, Lindrianasari, & Komalasari, A. (2018). Carbon Emission Issues in Indonesia. Review of Integrative Business and Economics Research, 7, 20–33.

OECD, & CDSB. (2015). Climate Change Disclosure in G20 Countries: Stocktaking of corporate reporting schemes.

Patten, D. M. (1992). Intra-industry environmental disclosures in response to the Alaskan oil spill: A note on legitimacy theory. Accounting, Organizations and Society, 17(5), 471–475.

Rohani, A. (2016). Carbon Behaviour, Carbon Reputation and Corporate Economic Performance: A Comparative Study of Carbon Intensive and Non-intensive Industries, (April). Retrieved from

Rokhmawati, A., Gunardi, A., & Rossi, M. (2017). How powerful is your customers’ reaction to carbon performance? Linking carbon and firm financial performance. International Journal of Energy Economics and Policy, 7(6), 85–95.

Russo, A., & Pogutz, S. (2009). Eco-efficiency vs eco-effectiveness. exploring the link between ghg emissions and firm performance. Academy of Management Proceedings, 2009, 1–6.

Saka, C., & Oshika, T. (2014). Disclosure effects, carbon emissions and corporate value. Sustainability Accounting, Management and Policy Journal, 5(1), 22–45.

Salbiah, & Mukhibad, H. (2018). Carbon Emission Disclosure and Profitability – Evidence from Manufacture Companies in Indonesia. KnE Social Sciences, 3(10 SE-Articles).

Schaltegger, S., Zvezdov, D., Guenther, E., Csutora, M., & Etxeberria, I. (2015). Corporate Carbon and Climate Change Accounting: Application, Developments and Issues (pp. 1–25).

Soewarno, N., Tjahjadi, B., & Firdausi, R. H. (2018). The Impacts of Carbon Emission Disclosure, Environmental Performance, and Social Performance on Financial Performance (Empirical Studies in Proper Participating Companies Listed in Indonesia Stocks Exchange, Year 2013–2016). KnE Social Sciences, 3(10 SE-Articles).

Stechemesser, K., Bergmann, A., & Guenther, E. (2015). Organizational Climate Accounting—Financial Consequences of Climate Change Impacts and Climate Change Adaptation (pp. 217–242).

TCFD. (2017). Recommendations of the Task Force on Climate-related Financial Disclosures: Final Report.

Wittneben, B., & Kiyar, D. (2009). Climate change basics for managers. Management Decision, 47.

Yu, H., Kuo, L., & Kao, M.-F. (2017). The relationship between CSR disclosure and competitive advantage. Sustainability Accounting, Management and Policy Journal, 8, 547-570.

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



  • There are currently no refbacks.

Published by:

Accounting Department supported by IAI KAPd Wilayah Aceh
Faculty of Business and Economics
Syiah Kuala University
Kopelma Darussalam, Banda Aceh, Indonesia - 23111
ISSN: 2355-9462, E-ISSN: 2528-1143


Creative Commons License
Jurnal Dinamika Akuntansi dan Bisnis by Prodi Akuntansi Universitas Syiah Kuala is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Based on a work at