RELEVANCE OF VOLUNTARY CARBON DISCLOSURE AND GREEN INNOVATION: THE IMPACT OF RATIFYING PRESIDENTIAL REGULATIONS IN INDONESIA

Abstract

The ratification of presidential regulation No. 98 of 2021 is an important step for Indonesia in achieving its NDC (Nationally Determined Contribution) target. This study aims to explore how the impact of these regulations on the relationship between carbon disclosure and green innovation in Indonesian companies. Environmental disclosure, especially carbon disclosure in Indonesia, is still voluntary. The level of adequate disclosure and the ability of companies to mitigate carbon emissions are still controversial. Voluntary environmental disclosure has a greenwashing risk and can mislead stakeholders in making decisions. This study uses the DID method to analyze this phenomenon. The data sample is 510 (company-year). The results of this study found that Indonesian companies have the motivation to mitigate carbon emissions, but there are still limited regulations. This research supports the need for more adequate regulations on carbon emission mitigation and regulations for the protection of stakeholders.

Keywords

• green innovation
• carbon emissions
• sustainability
• environmental accounting
• government policy