THE IMPLICATIONS OF SUSTAINABILITY & CLIMATE-RELATED REPORTING, ESG RISK, AND GREEN ACCOUNTING IN ACHIEVING SUSTAINABLE GROWTH
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Abstract
The issue of extreme increases in climate change is currently searching for who should be held responsible for the resulting losses. The world is asking for corporate accountability, which is considered a contributor to this increase in climate change. This study was conducted to determine how much influence the company has in reporting and managing its environmental, social and governance aspects seen from sustainability reporting, climate change reporting, unmanaged ESG risk, and green accounting on sustainable growth in companies listed on the Indonesia Stock Exchange in 2022. This study uses secondary data obtained from sustainability reports and financial reports of each company. The number of samples used was 79 companies represented by each sector based on the IDX Industrial Classification for the period 2022. The sampling technique used was non-purposive sampling with multiple linear regression analysis methods. The results showed that (1) Sustainability Reporting has no significant effect on Sustainable Growth, (2) Climate Change Reporting has no significant effect on Sustainable Growth, (3) Unmanaged ESG Risk has a significant positive effect on Sustainable Growth, and (4) Green Accounting has a significant negative effect on Sustainable Growth.
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Saputri Mashuri, A. A., & Annisa, S. N. (2024). THE IMPLICATIONS OF SUSTAINABILITY & CLIMATE-RELATED REPORTING, ESG RISK, AND GREEN ACCOUNTING IN ACHIEVING SUSTAINABLE GROWTH. Akurasi : Jurnal Studi Akuntansi Dan Keuangan, 7(2), 275 - 290. https://doi.org/10.29303/akurasi.v7i2.559
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Khatri, I., & Kjærland, F. (2023). Sustainability reporting practices and environmental performance amongst nordic listed firms. Journal of Cleaner Production, 418. https://doi.org/10.1016/j.jclepro.2023.138172
Kompas. (2023). Sektor Pertanian Berisiko Tinggi akibat Perubahan Iklim. Kompas.Id. https://www.kompas.id/baca/ekonomi/2023/08/21/sektor-pertanian-berisiko-merugi-hadapi-cuaca-ekstrem?status=sukses_login&status_login=login
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Oprean-Stan, C., Oncioiu, I., Iuga, I. C., & Stan, S. (2020). Impact of sustainability reporting and inadequate management of esg factors on corporate performance and sustainable growth. Sustainability (Switzerland), 12(20), 1–31. https://doi.org/10.3390/su12208536
Ottenstein, P., Erben, S., Jost, S., Weuster, C. W., & Zülch, H. (2022). From voluntarism to regulation: effects of Directive 2014/95/EU on sustainability reporting in the EU. Journal of Applied Accounting Research, 23(1). https://www.emerald.com/insight/content/doi/10.1108/JAAR-03-2021-0075/full/html
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Saini, N., Antil, A., Gunasekaran, A., Malik, K., & Balakumar, S. (2022). Environment-Social-Governance Disclosures nexus between Financial Performance: A Sustainable Value Chain Approach. Resources, Conservation and Recycling, 186. https://doi.org/10.1016/j.resconrec.2022.106571
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Terent’ev, N. E. (2021). Climate Change as a Factor in the Development of Companies: Corporate Strategies and Guidelines for State Industrial Policy. Stud. Russ. Econ. Dev, 32, 485–491. https://doi.org/10.1134/S1075700721050130
Tsagas, G., & Villiers, C. (2020). Why “less is More” in Non-Financial Reporting Initiatives: Concrete Steps towards Supporting Sustainability. Accounting, Economics and Law: A Convivium, 10(2). https://doi.org/10.1515/ael-2018-0045
United Nations Climate Change. (2022). United in Science: We are Heading in the Wrong Direction. UNFCCC. https://unfccc.int/news/united-in-science-we-are-heading-in-the-wrong-direction
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World Economic Forum. (2022). Stakeholder alignment on sustainability for competitive advantage. The World Economic Forum. https://www.weforum.org/agenda/2022/02/how-to-strengthen-sustainability-by-engaging-with-stakeholders/
Zhou, S., Rashid, M. H. U., Zobair, S. A. M., Sobhani, F. A., & Siddik, A. B. (2023). Does ESG Impact Firms’ Sustainability Performance? The Mediating Effect of Innovation Performance. Sustainability (Switzerland), 15(6). https://doi.org/10.3390/su15065586
Bataeva, B., Kokurina, A., & Karpov, N. (2022). The impact of ESG reporting on the financial performance of Russian public companies. Upravlenets, 12(6). https://doi.org/10.29141/2218-5003-2021-12-6-2
BBC News Indonesia. (2023). Bagaimana negara dan perusahaan pencemar bisa membayar kompensasi untuk perubahan iklim? BBC Indonesia. https://www.bbc.com/indonesia/articles/c3g4xdv480do
Beekue, P. J., & Lenuyiabari, J. (2022). Green Cost Accounting and Financial Performance of Selected Upstream Companies in Nigeria. Journal of Accounting and Financial Management, 8(5). https://doi.org/10.56201/jafmwww.iiardjournals.org
Bingler, J. A., Kraus, M., Leippold, M., & Webersinke, N. (2022). Cheap talk and cherry-picking: What ClimateBert has to say on corporate climate risk disclosures. Finance Research Letters, 47. https://doi.org/10.1016/j.frl.2022.102776
Callahan, C. W., & Mankin, J. S. (2022). National attribution of historical climate damages. Climatic Change, 172(3–4). https://doi.org/10.1007/s10584-022-03387-y
Carbon Disclosure Project. (2019). Major risk or rosy opportunity. CDP. https://www.cdp.net/en/research/global-reports/global-climate-change-report-2018/climate-report-risks-and-opportunities
Carbon Disclosure Project (CDP). (2017). New report shows just 100 companies are source of over 70% of emissions. CDP. https://www.cdp.net/en/articles/media/new-report-shows-just-100-companies-are-source-of-over-70-of-emissions
CNBC Indonesia. (2023). Cuaca Ekstrem Bikin Bisnis PLN Terganggu, Kok Bisa? . CNBC Indonesia. https://www.cnbcindonesia.com/news/20230522111720-4-439379/cuaca-ekstrem-bikin-bisnis-pln-terganggu-kok-bisa
Damayanti, R. S., & Yanti, H. B. (2023). Pengaruh Implementasi Green Accounting dan Material Flow Cost Accounting terhadap Sustainable Development. Jurnal Ekonomi Trisakti, 3(1), 1257–1266. https://doi.org/10.25105/jet.v3i1.16014
Deloitte. (2019). How Stakeholders Can Make Or Break Companies’ Sustainability Efforts. Forbes. https://www.forbes.com/sites/deloitte/2021/05/13/how-stakeholders-can-make-or-break-companies-sustainability-efforts/?sh=3d82d957476d
Dura, J., & Suharsono, R. (2022). Application Green Accounting To Sustainable Development Improve Financial Performance Study In Green Industry. Jurnal Akuntansi, 26(2), 192–212. https://doi.org/10.24912/ja.v26i2.893
Freudenreich, B., Lüdeke-Freund, F., & Schaltegger, S. (2020). A Stakeholder Theory Perspective on Business Models: Value Creation for Sustainability. Journal of Business Ethics, 166(1), 3–18. https://doi.org/10.1007/s10551-019-04112-z
Greenpeace Indonesia. (2023). Indonesia Ranking Satu Negara Paling Berpolusi se-Asia Tenggara - Greenpeace Indonesia. Greenpeace. https://www.greenpeace.org/indonesia/siaran-pers/56238/indonesia-ranking-satu-negara-paling-berpolusi-se-asia-tenggara/
Hardiningsih, P., Januarti, I., Yuyetta, E. N. A., Srimindarti, C., & Udin, U. (2020). The effect of sustainability information disclosure on financial and market performance: empirical evidence from Indonesia and Malaysia. International Journal of Energy Economics and Policy, 10(2), 18–25. https://doi.org/10.32479/ijeep.8520
Harrison, J. S., & Wicks, A. C. (2013). Stakeholder Theory, Value, and Firm Performance. Business Ethics Quarterly, 23(1), 97–124. https://www.jstor.org/stable/41967821
Higgins, R. C. (1977). How Much Growth Can a Firm Afford? Financial Management, 6(3), 7–16. https://doi.org/https://doi.org/10.2307/3665251
Hörisch, J., Schaltegger, S., & Freeman, R. E. (2020). Integrating stakeholder theory and sustainability accounting: A conceptual synthesis. Journal of Cleaner Production, 275. https://doi.org/10.1016/j.jclepro.2020.124097
Inc. (2023). Sustainable Growth. Inc. Magazine. https://www.inc.com/encyclopedia/sustainable-growth.html
Indriastuti, M., & Mutamimah, M. (2023). Green Accounting and Sustainable Performance of Micro, Small, and Medium Enterprises: The Role of Financial Performance as Mediation. The Indonesian Journal of Accounting Research, 26(02). https://doi.org/10.33312/ijar.691
Khatri, I., & Kjærland, F. (2023). Sustainability reporting practices and environmental performance amongst nordic listed firms. Journal of Cleaner Production, 418. https://doi.org/10.1016/j.jclepro.2023.138172
Kompas. (2023). Sektor Pertanian Berisiko Tinggi akibat Perubahan Iklim. Kompas.Id. https://www.kompas.id/baca/ekonomi/2023/08/21/sektor-pertanian-berisiko-merugi-hadapi-cuaca-ekstrem?status=sukses_login&status_login=login
Li, H., Guo, H., Hao, X., & Zhang, X. (2023). The ESG rating, spillover of ESG ratings, and stock return: Evidence from Chinese listed firms. Pacific Basin Finance Journal, 80. https://doi.org/10.1016/j.pacfin.2023.102091
Maji, S. G., & Kalita, N. (2022). Climate change financial disclosure and firm performance: empirical evidence from Indian energy sector based on TCFD recommendations. Society and Business Review, 17(4), 594–612. https://doi.org/https://doi.org/10.1108/SBR-10-2021-0208
Meutia, I., Kartasari, S. F., Yusrianti, H., & Yaacob, Z. (2022). Evolution of Sustainability Reporting Research: Evidence from Indonesia (A Systematic Literature Review). Indonesian Journal of Sustainability Accounting and Management, 6(1). https://doi.org/10.28992/ijsam.v6i1.501
Moreno, A. I., & Caminero, T. (2022). Application of text mining to the analysis of climate-related disclosures. International Review of Financial Analysis, 83. https://doi.org/10.1016/j.irfa.2022.102307
National Aeronautics and Space Administration (NASA). (2023). Evidence | Facts – Climate Change: Vital Signs of the Planet. https://climate.nasa.gov/evidence/
NOAA National Centers for Environmental Information. (2023). State of the Climate: Global Climate Report for 2022.
Oprean-Stan, C., Oncioiu, I., Iuga, I. C., & Stan, S. (2020). Impact of sustainability reporting and inadequate management of esg factors on corporate performance and sustainable growth. Sustainability (Switzerland), 12(20), 1–31. https://doi.org/10.3390/su12208536
Ottenstein, P., Erben, S., Jost, S., Weuster, C. W., & Zülch, H. (2022). From voluntarism to regulation: effects of Directive 2014/95/EU on sustainability reporting in the EU. Journal of Applied Accounting Research, 23(1). https://www.emerald.com/insight/content/doi/10.1108/JAAR-03-2021-0075/full/html
PwC. (2021). PwC’s 24th Annual Global CEO Survey: A leadership agenda to take on tomorrow.
Republika Online. (2023). Bappenas: Indonesia Berpotensi Merugi Rp 544 Triliun Akibat Perubahan Iklim | Republika Online. Ekonomi Republika. https://ekonomi.republika.co.id/berita/rzqj9r370/bappenas-indonesia-berpotensi-merugi-rp-544-triliun-akibat-perubahan-iklim
Rounaghi, M. M. (2019). Economic analysis of using green accounting and environmental accounting to identify environmental costs and sustainability indicator. International Journal of Ethics and Systems, 35(4), 504–5012. https://doi.org/https://doi.org/10.1108/IJOES-03-2019-0056
Saini, N., Antil, A., Gunasekaran, A., Malik, K., & Balakumar, S. (2022). Environment-Social-Governance Disclosures nexus between Financial Performance: A Sustainable Value Chain Approach. Resources, Conservation and Recycling, 186. https://doi.org/10.1016/j.resconrec.2022.106571
Sanoran, K. (Lek). (2023). Corporate sustainability and sustainable growth: The role of industry sensitivity. Finance Research Letters, 53. https://doi.org/10.1016/j.frl.2022.103596
Sugiyono. (2021). Metode Penelitian Kuantitatif, Kualitatif, dan R&D (Vol. 3). Alfabeta. https://opac.perpusnas.go.id/DetailOpac.aspx?id=1543971
Teng, X., Wang, Y., Wang, A., Chang, B. G., & Wu, K. S. (2021). Environmental, social, governance risk and corporate sustainable growth nexus: Quantile regression approach. International Journal of Environmental Research and Public Health, 18(20). https://doi.org/10.3390/ijerph182010865
Terent’ev, N. E. (2021). Climate Change as a Factor in the Development of Companies: Corporate Strategies and Guidelines for State Industrial Policy. Stud. Russ. Econ. Dev, 32, 485–491. https://doi.org/10.1134/S1075700721050130
Tsagas, G., & Villiers, C. (2020). Why “less is More” in Non-Financial Reporting Initiatives: Concrete Steps towards Supporting Sustainability. Accounting, Economics and Law: A Convivium, 10(2). https://doi.org/10.1515/ael-2018-0045
United Nations Climate Change. (2022). United in Science: We are Heading in the Wrong Direction. UNFCCC. https://unfccc.int/news/united-in-science-we-are-heading-in-the-wrong-direction
Weda, N., & Sudana, I. P. (2021). Sustainability Reporting dan Return Saham di Perusahaan Terindeks LQ45. E-Jurnal Akuntansi, 31(6), 1356. https://doi.org/10.24843/eja.2021.v31.i06.p01
World Bank. (2023). Bencana Alam Terkait Perubahan Iklim Meningkat di Skala Global. https://databoks.katadata.co.id/datapublish/2023/07/04/bencana-alam-terkait-perubahan-iklim-meningkat-di-skala-global
World Economic Forum. (2022). Stakeholder alignment on sustainability for competitive advantage. The World Economic Forum. https://www.weforum.org/agenda/2022/02/how-to-strengthen-sustainability-by-engaging-with-stakeholders/
Zhou, S., Rashid, M. H. U., Zobair, S. A. M., Sobhani, F. A., & Siddik, A. B. (2023). Does ESG Impact Firms’ Sustainability Performance? The Mediating Effect of Innovation Performance. Sustainability (Switzerland), 15(6). https://doi.org/10.3390/su15065586