MAKASSAR, Indonesia — Financial performance appears to play a stronger role in corporate social responsibility (CSR) disclosure than short-term liquidity or environmental performance ratings among Indonesian mining companies. This finding comes from a 2026 study by Samsinar of Universitas Negeri Makassar, together with Haliah and Darmawati of Universitas Hasanuddin. The researchers examined nine mining companies listed on the Indonesia Stock Exchange over the 2019–2022 period to assess whether profitability, liquidity, or the government’s PROPER environmental rating was associated with more extensive CSR disclosure.
The results show a clear distinction among the three factors. Profitability had a positive and statistically significant relationship with CSR disclosure, while liquidity and PROPER ratings did not show significant effects. At the same time, the three variables together explained only 14% of the variation in CSR disclosure, indicating that many other factors also influence how companies communicate their social and environmental responsibilities.
CSR Disclosure and the Mining Industry
Mining companies occupy an important position in Indonesia’s economy, contributing to economic activity and employment while operating in an industry closely connected to natural resources and environmental management.
For that reason, information about corporate social and environmental responsibilities is increasingly relevant to investors, regulators, communities, and other stakeholders.
Indonesia has established regulatory mechanisms related to CSR and environmental performance. The study highlights Law No. 40 of 2007 and the PROPER (Program Penilaian Peringkat Kinerja Perusahaan) system operated by the government. PROPER evaluates corporate environmental performance using five color categories: Gold, Green, Blue, Red, and Black.
However, regulation and environmental ratings do not automatically result in broader CSR disclosure. The article notes that environmental information has remained one of the less extensively disclosed categories in reports from Indonesian mining companies.
This situation raises an important question: what factors are actually associated with the extent of CSR information disclosed by mining companies?
Nine Companies Examined Over Four Years
Samsinar, Haliah, and Darmawati used quantitative analysis to examine mining companies listed on the Indonesia Stock Exchange between 2019 and 2022.
The researchers selected companies that remained listed throughout the period, published complete annual reports, had PROPER ratings for each year, and provided the financial information required for analysis. The final sample consisted of nine mining companies, producing 36 company-year observations.
CSR disclosure was measured using 38 indicators based on the Global Reporting Initiative (GRI) 11 standard for the mining sector. The indicators cover economic, environmental, and social information.
Three factors were then examined:
- Profitability, measured through Return on Assets (ROA)
- Liquidity, measured through the Current Ratio
- Environmental performance, represented by the PROPER rating
The researchers analyzed annual and sustainability reports and applied statistical testing using SPSS to examine the relationships between these factors and CSR disclosure.
Average CSR Disclosure Reached 47%
The data provide an important picture of the reporting practices within the sample.
The average CSR disclosure index stood at 47%, meaning the companies disclosed less than half of the 38 GRI-based indicators used in the analysis.
The average ROA was 1.06%, with values ranging from approximately -0.05% to 8.80%. The average Current Ratio was 2.01, indicating variation in companies’ short-term financial positions.
The PROPER data showed a much narrower range. The average rating score was 1.43, with observations ranging from 1.09 to 1.61. According to the study, all observations fell within the Red to Blue categories, with no Green or Gold ratings during the period examined.
Profitability Shows the Strongest Relationship
Among the three factors examined, profitability was the only one that demonstrated a statistically significant positive effect on CSR disclosure.
The analysis produced a coefficient of 0.02 for ROA, with a significance value of 0.04, below the 0.05 threshold used in the study. The authors interpret this as evidence that companies with stronger profitability tended to provide more extensive CSR disclosure.
Samsinar, Haliah, and Darmawati explain the result in terms of the resources available to profitable companies. Stronger financial performance can provide greater flexibility to allocate resources toward sustainability reporting and other forms of corporate communication.
The authors also connect the result with signaling theory, in which comprehensive CSR disclosure can serve as a signal of corporate quality to external stakeholders.
Liquidity Does Not Determine CSR Transparency
Liquidity produced a different result.
The Current Ratio had a coefficient of 0.01 and a significance value of 0.42, meaning it did not have a statistically significant effect on CSR disclosure in the sample.
The authors suggest that CSR disclosure is more closely connected to strategic, long-term decisions than to a company’s short-term ability to meet financial obligations.
The result remained consistent even though the Current Ratio varied considerably among the observations, ranging from 0.27 to 5.65.
PROPER Rating Shows No Significant Effect
The environmental performance variable also produced an unexpected result.
The PROPER rating had a coefficient of 0.19 but a significance value of 0.15, meaning its relationship with CSR disclosure was not statistically significant under the study’s 5% threshold.
One explanation offered by the authors is the limited variation in PROPER ratings among the companies examined. Because all observations were concentrated between Red and Blue categories, the dataset did not include companies with Green or Gold ratings that could provide greater variation for comparison.
The finding therefore does not suggest that environmental performance is unimportant. Instead, it indicates that PROPER ratings in this particular sample and period did not significantly explain differences in CSR disclosure.
Most CSR Disclosure Drivers Remain Outside the Model
Another important result is the relatively low explanatory power of the statistical model.
Profitability, liquidity, and PROPER ratings together explained only 14% of the variation in CSR disclosure. The remaining 86% was associated with factors outside the model.
The researchers identify several possible factors for future investigation, including company size, leverage, board characteristics, and ownership structure. The COVID-19 pandemic, which occurred during part of the research period, may also have influenced financial performance and CSR reporting practices.
Implications for Companies and Regulators
The findings provide several practical considerations for companies, investors, and policymakers.
For corporate management, the results indicate that stronger profitability may provide greater capacity to develop comprehensive CSR reporting. Sustainability reporting can also help companies communicate relevant information to stakeholders in a structured and transparent way.
For regulators, the absence of a significant relationship between PROPER ratings and CSR disclosure suggests an opportunity to strengthen the connection between environmental performance assessment and broader sustainability reporting. The authors propose that environmental ratings could be linked more closely with reporting requirements to encourage greater transparency.
At the same time, the authors emphasize that the findings should be interpreted within the study’s limitations. The research covers only nine companies and 36 company-year observations, while the narrow range of PROPER ratings limits the ability to assess differences across the full rating spectrum.
Author Profiles
Samsinar is affiliated with Universitas Negeri Makassar. Haliah and Darmawati are affiliated with Universitas Hasanuddin. Their research in this article focuses on CSR disclosure, corporate financial performance, liquidity, profitability, and environmental performance in Indonesia’s mining sector.
Research Source
Article Title: Drivers of CSR Disclosure in Mining Sector: Liquidity, Green Index, or Profitability?
Authors: Samsinar, Haliah, and Darmawati
Journal: International Journal of Finance and Business Management (IJFBM)
Publication Year: 2026
Volume: 3, No. 3
Pages: 257–270
DOI: https://doi.org/10.59890/ijfbm.v4i3.1
Affiliations: Universitas Negeri Makassar and Universitas Hasanuddin.
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