Profitability Strengthens the Impact of Carbon Transparency on Firm Value in Non-Cyclical Consumer Sector in Indonesia

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FORMOSA NEWS

An in-depth study on the determinants of carbon emission disclosure and its impact on firm value with profitability as a moderating variable has been completed by Kurniawati and Maureen Aurelia from Universitas Bunda Mulia, Tangerang. Published in 2026, this research is crucial amidst rising global climate change threats and issuer commitments to sustainability, where environmental transparency has become a primary focus for capital market participants.

The issue of climate change caused by greenhouse gas emissions has driven regulators in Indonesia to mandate sustainability reporting through POJK No. 51/POJK.03/2017. However, detailed carbon emission disclosures in the country remain largely voluntary. This condition triggers variations in disclosure practices among issuers as well as mixed findings in prior research regarding the direct relationship between carbon transparency and firm value.

This study applies a quantitative approach using a purposive sampling technique on non-cyclical sector companies listed on the Indonesia Stock Exchange (IDX) during the 2021–2024 period. Through strict data selection, a total of 97 observations from 26 companies were collected and analyzed using multiple linear regression and moderated regression analysis methods via statistical software.

The results of the data analysis show several key findings:

• Firm size proved to be the only significant determinant of the level of carbon emission disclosure, where large-scale companies tend to be more transparent due to high public and stakeholder scrutiny.
• Leverage and the implementation of Environmental Management Systems (EMS) such as ISO 14001 certification do not have a significant effect on the extent of carbon emission disclosure.
• Carbon emission disclosure does not automatically boost firm value; instead, profitability is proven to significantly strengthen the positive impact of such disclosure on the market value of the firm.

According to Kurniawati and Maureen Aurelia from Universitas Bunda Mulia, the market highly appreciates environmental transparency when issuers can prove strong financial performance. The practical implication of this research directs corporate management to align sustainability reporting with financial performance to boost long-term value. Additionally, regulators are encouraged to strengthen the standardization of the carbon reporting framework, while investors are advised to comprehensively evaluate environmental transparency alongside profitability indicators.

Author Profiles:

Kurniawati and Maureen Aurelia are academics and researchers from Universitas Bunda Mulia, Tangerang, Indonesia, who possess expertise in financial accounting, corporate governance, and sustainability and carbon emission reporting.

Research Source:

Kurniawati, & Aurelia, M. (2026). Determinant of Carbon Emission Disclosure and its Impact on Firm Value: Moderating Role of Profitability. Indonesian Journal of Business Analytics (IJBA), 6(4), 815–834. DOI: https://doi.org/10.55927/ijba.v6i4.16874