Corporate Governance: Driving Climate Change Disclosure and Advancing SDGs

Indah Fajarini Sri Wahyuningrum (), Niswah Baroroh, Heri Yanto, Retnoningrum Hidayah, Annisa Sila Puspita and Laela Dwi Elviana
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Indah Fajarini Sri Wahyuningrum: Department of Accounting, Faculty of Economics and Business, Universitas Negeri Semarang, Semarang 50229, Indonesia
Niswah Baroroh: Department of Accounting, Faculty of Economics and Business, Universitas Negeri Semarang, Semarang 50229, Indonesia
Heri Yanto: Department of Accounting, Faculty of Economics and Business, Universitas Negeri Semarang, Semarang 50229, Indonesia
Retnoningrum Hidayah: Department of Accounting, Faculty of Economics and Business, Universitas Negeri Semarang, Semarang 50229, Indonesia
Annisa Sila Puspita: Assessment of Greenhouse Gas Emissions, Environmental Sustainability Research Group, Semarang 50275, Indonesia
Laela Dwi Elviana: Department of Accounting, Faculty of Economics and Business, Universitas Negeri Semarang, Semarang 50229, Indonesia

JRFM, 2025, vol. 18, issue 5, 1-20

Abstract: Climate change presents a critical challenge to achieving the 2030 Sustainable Development Goals (SDGs), particularly SDG 13 on Climate Action. This study examined the effect of corporate governance on carbon emission disclosure and carbon performance among 150 non-financial firms listed on the Indonesia Stock Exchange (IDX) from 2016 to 2022. Drawing on stakeholder, legitimacy, agency, and resource dependence theories, the study utilized panel data comprising 468 firm-year observations and employed ordinary least squares (OLS) regression to assess both direct and moderating effects. The findings indicate that governance attributes covering board size, board gender diversity, foreign ownership, and the presence of a CSR committee had a positive effect on carbon emission disclosure and carbon performance. Moreover, these governance factors enhanced the correlation between disclosure and performance, suggesting that robust governance could strengthen the environmental impact of transparency. However, board independence exhibited a negative or statistically insignificant effect, highlighting a potential disconnect between governance expectations and environmental oversight in emerging markets. Despite increasing awareness, the levels of carbon disclosure and performance in Indonesia remained low, averaging only 27.8% and 6.6%, respectively. This study provides policy recommendations to strengthen ESG regulations, encourages firms to institutionalize sustainability practices, and calls for cross-country comparative research to improve generalizability.

Keywords: carbon performance; climate change; corporate governance; Sustainable Development Goals (SDGs) (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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