Environmental disclosures in mining companies: are there any stakeholder demands?

This research investigates the influence of stakeholder demands on environmental disclosure in mining companies in ASEAN. The influence of these stakeholders is analyzed using the stakeholder theory framework. The research sample is 100 companies in the mining industry listed in the OSIRIS database in 2017-2019. This research uses seven independent variables that represent the strengths of three stakeholder groups. Environmental disclosure data is obtained using content analysis from annual reports and company sustainability. Shareholders, creditors, and auditors were found to be significant predictors of environmental disclosure in mining companies. On the contrary, creditor’s demands are not seen as driving corporate environmental disclosure in most ASEAN countries but have a significant effect in Philippine. In general, this research is in line with stakeholder theory which encourages companies to pay attention to the demands of stakeholders to carry out the best corporate social responsibility, especially on environmental disclosure.


Introduction
Stakeholder theory states that whatever the ultimate goal of a company or other form of business organization, managers and entrepreneurs must consider the interests of groups and individuals who can influence (or be influenced) by their activities [2][21] [54] [71].[89] companies must assess the needs of various stakeholder demands to achieve their strategic goals.Furthermore, companies also need to ensure survival and continous success so that stakeholder demands are met [63][73] [76].For this reason, companies need to maintain ongoing dialogue and partnerships with stakeholders [73][77] [90].
Research on the influence and demands of stakeholders on companies has received more attention [72] [92], and the results show that companies have a social responsibility to meet their demands [51] [85].One of the company means to show social responsibility is by making environmental disclosures 1248 (2023) 012005 IOP Publishing doi:10.1088/1755-1315/1248/1/012005 2 [19] [49].Previous studies in environmental disclosure have found various stakeholder groups or constituents that encourage companies to expand their environmental information disclosure [1][3] [11] [26] [48].[42] state that environmental disclosure can be perceived as a company's response to the pressure exerted by stakeholders or constituents.When stakeholders apply more pressure, companies will demonstrate more action to meet their demands through communication, by publishing social and environmental disclosures [67].
There are several studies that focus on requests for social and environmental disclosure from stakeholders, such as shareholders or investors [57][59] [65] and non-governmental organizations [12] [14] [86].This research confirms that stakeholders do influence disclosure decisions and policies.
This research was conducted by considering the inconsistency of research results regarding the relationship between stakeholder groups and environmental disclosure and this research aims to replicate the research conducted [48].Replication, as suggested by [56], is necessary not only to validate one's findings, but to increase the significance level of findings with different conditions and predictable exceptions.This research uses a sample of mining companies, where the mining industry is often accused of being the main cause of environmental damage that occurs because of its voracity to exploit natural resources [83].
In Indonesia, about 70% of environmental damage due to exploitation of natural resources is caused by mining operations (www.kompas.com).In 2017, the Philippine Government closed or suspended dozens of mines after a government investigation found that the mines were illegally cutting trees and polluting rivers (www.cbn.com).In the last 20 years, Vietnam's north coast has experienced degradation caused by industrialization, urban development, coal mining and tourism (www.worldbank.com).[80] state that mining sector company is extractive industries whose operational activities use non-renewable natural resources.This company has a big responsibility to carry out environmental disclosures because its activities have a wide environmental impact [55].
This research examines a sample of three-year periods (2017-2019) consisting 96 mining companies in ASEAN.The results of research by [48] show the low demand for companies from stakeholders to make environmental disclosures.Taking into account the results of this research, this research uses a broader sample by selecting companies engaged in mining in ASEAN.

Literature and Hypothesis Development
Stakeholder is a group that is able to provide support for the existence of an organization [71].According to [31] stakeholders are groups or individuals who can influence or be influenced by the process of achieving the goals of an organization.Stakeholder theory says that a company is not an entity that only operates for its own interests but must provide benefits for its stakeholders (shareholders, creditors, consumers, suppliers, government, society, analysts, and other parties) [54].The existence of a company is strongly influenced by the support provided by stakeholders to the company [33].[38] said that the company's survival depends on stakeholder support and that support must be sought; thus, the company's activity is to seek that support.The more powerful the stakeholder, the greater the company's effort to adapt [89].
Stakeholder theory related to the concept of corporate social responsibility is not only limited to maximizing profit and shareholder interests, but also must pay attention to the community, customers and suppliers as part of the company's operations [2].Stakeholders will support the company's operational activities if they disclose reliable and relevant information so that stakeholders continue to trust and help the company in making decisions [32].Thus, assessing the importance of stakeholder requests is the main role of company management in achieving the company's strategic objectives.
When stakeholders gain influence over the company, the company is required to consider the company's previous needs and modify its activities to minimize conflicts of interest [78].Social and environmental disclosure is seen as a way of companies responding to their stakeholders.Since stakeholders pay more attention to the company's strategy, service and attitude regarding environmental issues, they are happy to see the company's economic performance which does not damage the environment [39].
Environmental disclosure is usually seen as a way to reduce stakeholder pressure before the enactment of more stringent environmental regulations or laws in the future [8]; [20].Legitimacy theory asserts that organizations continue to strive to ensure that they are perceived to be operating within the boundaries and norms of their respective societies, namely trying to ensure that their activities are considered by outsiders as "legitimate" [17] [67].
[41] note the expansion of the advocacy movement in the United States during the 1960s and 1970s, and the significant increases in legislation relating to social issues, including environmental, employee health, and safety that were enforced in the United States during this period.Legitimacy theory relies on the idea that there is a 'social contract' between the company and the communities in which it operates [13][74] [16].Several studies on social environmental disclosure have used legitimacy theory as a basis for explaining disclosure practices [74][88] [93].[22] explain that legitimacy theory is very useful in analyzing organizational behavior with respect to the environment.
The two theories as described above basically state that stakeholders have the power to suppress the organization and can have more control which is reflected and published in social and environmental disclosures.[13] states that stakeholder theory is relevant in explaining environmental disclosures.This was added [27], stakeholder theory is important, because it can be used to understand how stakeholder expectations regarding environmental disclosure can influence company behavior regarding the intervention strategy to be taken.
Over the past several decades, a number of companies that have disclosed environmental information either as part of their annual reports or stand-alone environmental reports has increased.This increasing trend appears in line with the findings of various studies which also provide results that environmental disclosure of all types of companies has increased over time [13][27] [38].As a preliminary research, [84] used a survey to compare the social responsibility attitudes of activist groups and corporate managers and concluded that company management does not have to change their beliefs to suit stakeholders, but managers should consider stakeholder conflicts of interest when planning corporate strategy.[94] According to [77], social responsibility disclosure can be used by management as a strategy designed to meet government demands [25] shows that the main determinants in providing environmental disclosure are the level of environmental concern by top management and the government's authority to impose sanctions on companies.[10] states that there is a relationship between environmental manager's attitudes towards various stakeholder groups and how these managers recognize stakeholders in making decisions to make environmental disclosures.Huang and Kung (2010), dividing stakeholder groups as internal, external, and intermediary stakeholders.The results show that the level of corporate environmental disclosure is significantly influenced by the demands of stakeholder groups.From all the findings above, it can be concluded that various demands, pressures, and power from various stakeholders affect how companies form strategies, react and behave by demonstrating their social responsibility actions and behavior to meet these demands.
One such action is carried out through the publication and disclosure of social and environmental information, where environmental disclosure is then seen as the way companies communicate and negotiate with their stakeholder groups.This research analyzes how companies respond to stakeholder demands so as to explain the motives that encourage companies to make environmental disclosures.The main contribution of this research lies in the comparison of responsiveness to the demands of three types of stakeholders, namely external, internal, and intermediary stakeholders.

Internal stakeholder group
[2010] classified internal stakeholder groups into shareholders and employees.[52] argues that a more dispersed ownership structure will result in wider stakeholder demands and more diverse transparency.When share ownership is spread, it automatically creates more monitoring and the company will disclose more environmental information [28].[89] also argues that with stock diversification, shareholders will pay more attention to social and environmental activities and therefore encourage companies to show greater social responsibility.[29] and [44] state that the higher the level of management ownership, the higher the motivation to disclose the company's activities.Management ownership has positive effect on the cash out of corporate social responsibility program [66].
According to Elijido-Ten [26], employees are the company's main stakeholders because they are one of the company's main resource providers.Given that employees have control over the resources needed by the company and how critical these resources are for the survival of the company, it is important for the company to meet employee demands, in this case by disclosing social and environmental information.[37] stated that companies should pay attention to employees because they are the company's main target in environmental disclosure.Furthermore, [35] stated that the number of employees greatly influences the disclosure of social and environmental information.Based on the description above, the following hypothesis is built: Hypothesis 1 (H1): There is a relationship between environmental disclosure and the demands of internal stakeholders.

External stakeholder group
As for external stakeholder groups, [48] classify them into government, creditors, consumers, and competitors.The government is said to have the most influence on companies [36].The government can provide fines for companies that violate environmental regulations or even close their businesses.[15] found that companies that were sued for violating environmental regulations were less likely to disclose more positive environmental information in its annual report.This is also evidence for stakeholders that the demands on CSR have been met.For this reason, companies will disclose more environmental information to increase legitimacy [8] [75].
Creditors, as stated by [92], have a greater influence on company policy, in this case environmental policy when the borrowing company has high financial leverage.From a creditor's point of view, when the company's activities have a negative impact on the environment, the company will face sanctions or fines, which can damage the rights and interests of creditors.The more a company depends on debt financing, the more likely it is to disclose more environmental information so that the company has lower risk [25].
Suppliers will demand more transparent information to prevent themselves from being exposed to poor environmental performance.Suppliers will cut off their supply to avoid risks associated with the company which can then affect their reputation and corporate image [43].Customer attachment to the company's environmental disclosure and its contents is also an indication that environmental performance is actually intended to serve customers [48].According to [70] customers have a significant influence on environmental responsibility as customers and companies have a direct relationship.In another sense, if a company in doing its business violates or damages the environment, it will cause customers not to give a good response.This is confirmed [53] who stated that reputation is one of the factors a company can earn revenue.The better the reputation of a company, the more purchases made by customers in which resulting the increased company sales.
Companies with a higher market share can exhibit greater influence in market control; hence, it will cause the company to get greater attention from the public and other competitors [81].To anticipate this, companies will disclose more information about their environmental disclosures.Hypothesis 2 (H2): There is a relationship between environmental disclosure and the demands of external stakeholders.

Intermediary stakeholder groups
Intermediary stakeholder groups are classified into environmental protection organizations and accounting firms.According to [15], companies in industries with higher sensitivity will increase the level of environmental disclosure under pressure from environmental organizations.[48] add that the power of auditor monitoring affects the quality of company information disclosure.Hypothesis 3 (H3): There is a relationship between environmental disclosures and the demands of intermediary stakeholders.

Samples and data
Mining companies in the most polluting industrial sectors (energy, metal production and processing, and minerals or mining) were selected in relation to sample homogeneity and break the limitations of [23] findings as it states that heterogeneity is considered a major weakness of the research results.The sample in this research were mining companies in ASEAN included in OSIRIS from 2017-2019.
The type of data used in this research is panel data, which is taken from secondary sources, both quantitative and non-quantitative, that are available in the company's annual report in the OSIRIS database or downloaded from the company's website and sustainability reports downloaded from the company's website or on the website of a global CSR provider.The dependent variable in this research is environmental disclosure, which is measured both in annual reports and in sustainability reports.In the social and environmental reporting literature, this analysis is used extensively to assess the extent to which disclosures are disclosed in annual reports or sustainability reports.Although this research is replicating the research of [48], it uses a different index.The environmental disclosure index selected in this research uses the GRI index which is recognized as the best sustainability reporting guideline in environmental practice and the guideline most widely adopted by companies worldwide.For content analysis scores, code 0 if it does not reveal certain items in the annual report or sustainability report, and code 1 if there are certain items that are disclosed in the annual report or sustainability report [9]; [47]; [46].Therefore, the environmental disclosure score may range from 0 to 34.

Independent variable.
On the independent variable, stakeholder expectations using [48].However, due to the unavailability of advertising cost data, this research uses sales turnover as a variable measure for [45].Sales turnover is a customer strength because it is revenue for the company.Furthermore, regarding fines and penalties as measures of government variables, in this research there were no companies that were subject to government fines and penalties so that government variables were not used.

ROA
The profitability ratio used to measure the effectiveness of the company in produce profit by utilizing assets owned by the company.
The ratio of net income to total assets to measure the return on total assets (Brigham and Houston)

GROWTH
A ratio that measures how much the company's ability to maintain its position in the industry Sales growth, comparing sales in year t after deducting sales in the previous period against sales in the previous period [

Control variable.
This research uses control variables in the form of ROA, growth, investor protection index available at www.doingbusiness.org,and the Resource Management Index developed by SolAbility.

Method analysis
The data analysis technique used in testing the hypothesis in this research uses panel regression with the help of software Eviews 10.This research looks at the relationship between stakeholder expectations and environmental disclosure with the econometric model as follows: EDI = α0 + β1OWN + β2EMP + β3LEV + β4SALES + β5INVT + β6MKTS + β7AUDIT + β8ROA + β9GROWTH + β10PMI + β11RMI + εit

Descriptive statistics
The following table 3 provides descriptive statistical information about each variable.In summary, the mean for the Environmental Disclosure Index for mining companies ASEAN is 15.01.The level of environmental disclosure of the sample companies is at an average level, with a minimum value of 0 to a maximum of 34 with a standard deviation of 10.06.

Correlation analysis
Table 4 shows the correlation matrix of all variables tested in the research and the results show that it does not indicate a choleniarity problem as the highest correlation coefficient value is 0.2637, the correlation between EMP and AUDIT.Following the rule of thumb from [40] to define multicollinearity problems, the maximum correlation coefficient between regressors is 0.8.The positive correlation coefficient means that the higher the environmental disclosure made by the company, the higher the demands of the stakeholders and the lower the environmental disclosure, the lower the demands of the stakeholders.For a negative correlation coefficient, the more environmental disclosure the company makes, the lower the demands of stakeholders.

Regression results
To determine the effect of the independent variable on the dependent variable, this research first tested each independent variable separately by including the control variable on environmental disclosure (1)(2)(3)(4)(5)(6)(7), then tested all of them simultaneously (8).As seen in Table 5, there are consistent results from testing the independent variable on the dependent variable both separately and simultaneously.0022 Note: OWN = blockholder ownership (shareholders); EMP = employee; LEV = leverage (creditors); SALES = log sales (consumers); INVT = inventory turnover (supplier); MKTS = market share (competitors); AUDIT = auditor type; ROA = return on assets; GROWTH = growth of sales; PMI = investor minority protection; RMI = resource management index *, **, ***, shows significant at the 10%, 5%, and 1% levels From the regression results, this research shows that there is a positive relationship between shareholder demands and environmental disclosures.This is in line with [24] who claims that shareholders, known as blockholders, play an important role in governance because the size of their shares in the company provides an impetus to monitor company activities.Thus, blockholders can help improve reporting quality and transparency.Low ownership concentration can be equated with managerial control [62]; [68].However, the same results were not shown for employee demands.This is in accordance with [4], [7], and [50] who state that employees tend to think that social responsibility can add to the burden of the company so that it can reduce their salary.Thus, the first hypothesis is not supported.

TABLE 5. Results of Environmental Disclosure Regression
Among external stakeholders, only creditors have influence on environmental disclosure (second hypothesis is not supported).[48], [6], and [82] suggest that creditors will ask for more information to be disclosed when companies face high financial risks as a way to stay informed about company developments and to make appropriate economic decisions.Meanwhile, consumers, suppliers and competitors do not have influence on environmental disclosure as shown in the results of this research.A customer-oriented company must pay more attention to its social responsibility to society, because this will improve the company's image [58].This is the reason why customers do not make demands on environmental disclosures.One of the reasons for the insignificant relationship between suppliers and environmental disclosures leads to the results of [34] which show suppliers are classified as the least important by respondents.This insignificant relationship was also captured [45].
Intermediary stakeholders indicate the existence of external auditors has influence on environmental disclosure.The existence of an audit conducted by the big four accounting firms on the company's financial statements renders the company's environmental disclosure to get wider [79].This is in line with [18] who states that auditors with high reputations such as the big four like clients who report a lot of information about their company in their annual reports.Thus, the third hypothesis is supported.
The only control variable that affects environmental disclosure is the investor protection index.Different environmental problems of a country can be due to various things depending on the situation and conditions.This is evidenced by the requirements for reporting specific information related to environmental impacts and the level of presentation of voluntary disclosures [91].The existence of protection in this investment is very necessary and can affect the breadth of environmental disclosure [64].

Advanced analysis
To provide broader knowledge, this research conducts further analysis by examining the effect of independent variables on environmental disclosure by countries in the ASEAN region (Indonesia, Malaysia, Singapore, Thailand and the Philippines).Then, this research also carried out further testing by dividing the sample into two groups based on the Return on Assets owned by each company, namely positive ROA (total assets used to operate, the company is able to provide profits for the company) and negative ROA (company profit is negative).The results shown in Panel A, blockholder ownership have a negative direction towards environmental disclosure shown in Malaysia, Singapore, and the Philippines.Meanwhile, consumers and suppliers in Malaysia and Singapore have concerns about environmental disclosure by companies (indicated by a significance level of 1% and 5%).This means that consumers in Malaysia and Singapore pay attention to the products they consume, whether the company operates in an environmentally friendly manner, preserving the environment, and other sustainability considerations.Meanwhile, competitors in Malaysia, Singapore, and the Philippines paid attention to the environmental disclosures of their opponents.These results also confirm previous findings.
Meanwhile, the results of panel B, in a profit condition (positive ROA), indicate employee demands for environmental disclosure.[60] argues that the implementation of Corporate Social Responsibility can increase employee loyalty by implementing good human resource development programs in accordance with the principles of implementing corporate social responsibility that are positively correlated with company reputation.Thus, Corporate Social Responsibility carried out by the company can increase employee loyalty which in turn can help increase company productivity, which will be followed by increased company profitability.In contrast to positive ROA, negative earnings conditions in the company result in higher demands from stakeholders.This is shown, in the significance of creditors and customers.Companies are required to provide their best image, one of which is by making environmental disclosures.The company can integrate its strategic planning process with environmental protection issues, so it can build a brand image in the eyes of consumers so that the company's concern for the environment is positively related to the company's profitability which can improve the company's reputation [5]; [69].

Conclusion
This research analyzes how the influence of stakeholder demands on environmental disclosure using sample of 100 companies from five countries in ASEAN.The statistical results show that overall, the internal and external stakeholder groups do not affect the company's environmental information disclosure.Despite this insignificance, there are significant findings on the claims for ownership of blockholders, creditors, and auditors (intermediary stakeholder groups).The demands of employees, customers, suppliers and competitors in this research appear weak, which is evidenced by the insignificance of the test results.However, it is different if the company experiences a loss as shown in further testing, the stakeholder demands are higher when compared to the company in a profit condition.In line with stakeholder theory, stakeholders have demands on companies to carry out their best environmental disclosure practices.Furthermore, this research is to prove that mining companies are involved in preserving the environment around them.
In this research, there are several limitations that must be considered, including the scope and number of samples that are limited to only 100 mining companies in ASEAN which are listed in the OSIRIS database.Therefore the results of this research are limited to the ASEAN context and cannot be generalized to other contexts.Another limitation is that no standard measurements have been found in the environmental disclosure literature.
In connection with the limitations described above, this research suggests several considerations that can be used in further research, such as expanding the research sample to cover all mining companies in the world so that the results can be generalized.In addition, further research can prove and compare the results using the environmental disclosure index developed by [48].

Table 1 .
Table 1 shows the number of samples observed in this research.Indonesia occupies the largest number of mining companies from the sample used.Research