Corporate governance in Basic Material and Energy Sector Companies, green strategy, and carbon emissions disclosure

This study aims to find empirical evidence of the influence of corporate governance and green strategy on carbon emission disclosure. This study uses a quantitative approach using panel data regression with a sample size of 105 energy and basic material sector companies listed on the Indonesia Stock Exchange for the 2018-2022 period. The technical analysis used in this research is software EViews 12. The results of the t test that was carried out to test the first hypothesis showed a t-statistic value of 2.132. and significance 0.0354 < 0.05. This value indicates that the quality of carbon emissions is significantly determined by good corporate governance. Tests carried out on the second hypothesis produced a t-statistic of 1.496 with a significance of 0.000 <0.05, which indicates that companies that adopt a green strategy will tend to carry out activities that reduce carbon emission levels. Meanwhile, the results of testing the third hypothesis show a t-statistic value of 3.023 and a significance of 0.0032. The value of testing this third hypothesis explains that large companies tend to carry out higher carbon emission reduction activities, in line with the increasing attention and expectations of stakeholders for these companies.


Introduction
Activities that are often carried out by humans without realizing it cause environmental problems such as carbon emissions.The ever-increasing carbon emissions are becoming an environmental problem, which is causing climate change and global warming.This problem continues to develop to have a negative impact because environmental quality will decrease and will increase greenhouse gas emissions [1].The government also expects companies to be able to disclose the activities carried out by companies to control carbon emissions [2; 3] Companies that run businesses in the community cause the community to ask for accountability for activities that have a negative impact on society [4].Indonesia is dedicated to cutting back on emissions of greenhouse gases and preventing climate change after seeing the increasing growth in carbon emissions.One of the commitments made by Indonesia is by ratifying the Paris Agreement in New York.The Indonesian government has also issued POJK No. 51/POJK.03/2017Article 10 which requires all issuers, public companies and financial services institutions (LJK) to prepare a sustainability report.Carbon emissions disclosure is also a signal shown to investors that the capital they invest is being used by companies properly to protect the environment [5].In this study, the factors to be investigated because they are suspected of having an influence on the carbon emissions disclosure are corporate governance and green strategy.With good governance, companies can provide 1324 (2024) 012085 IOP Publishing doi:10.1088/1755-1315/1324/1/012085 2 added value to stakeholders and companies must protect the surrounding environment so that there is reciprocity between the company and the community.Company managers will develop green strategies and adopt more innovative attitudes towards the environment in order to reduce carbon emissions [6].
Research using the independent variables capital expenditure and internal governance as well as the dependent variable carbon emission disclosure found that there is a positive relationship between capital expenditure and carbon emissions disclosure [7].Likewise, there is a positive relationship between corporate governance and carbon emissions disclosure.Previous research has tested the influence of green strategy and green investment and found a significant influence of these two variables on activities to reduce the company's carbon emission levels [8].This research aims to find empirical evidence of the influence of corporate management and green strategy on corporate behavior in reducing carbon emissions as measured by disclosure information in the company's annual report.This research will use research objects, namely energy and raw materials sector companies in the 2018-2022 research period.The corporate governance measurement variable is also different from previous studies because it uses the ASEAN Corporate Governance Scorecard index.

Theoretical review
Legitimacy theory explains that companies aim to fulfil the expectations of the people around them to gain legitimacy.Based on the concept of social contracts, legitimacy theory emphasizes that company activities must be in line with the values of its society [9; 10].The sustainability of company activities with the needs and expectations of society will greatly determine the legitimacy that the entity obtains.Minimizing the company's impact on the environment is one of the company's needs and hopes.Disclosure about reducing carbon emissions is one of the activities that shows the company's awareness of its concern for the environment.This activity has been confirmed to be accepted by the community and other stakeholders [3; 4].Companies with good governance are found to be concerned with reducing carbon emissions, and this becomes a medium for company communication to stakeholders.Due to the pressure of legitimacy and in order to gain recognition from society, companies are driven to meet the needs and expectations of society [11; 16].
Companies will gain legitimacy by having green initiatives and making environmental disclosures.Stakeholders have pressure on companies so that companies can respond to these pressures by carrying out environmentally responsible practices and disclosing through communication channels [12; 13].With good governance, companies will increase the transparency of emission disclosures so that they can be communicated with stakeholders [7].The company has a green strategy with the aim of meeting stakeholder demands [14].

Research method
The data used in the research is secondary data which explains elements of governance, green strategy, carbon emission disclosure and company size.Company size is set as a moderating variable because previous research shows that company size influences stakeholder expectations in viewing the company's behaviour [15].The data used in this study is secondary data taken from company annual reports and sustainability reports from energy and basic materials sector companies listed on the Indonesia Stock Exchange (IDX) for the 20182022 period.Purposive sampling is the method used to calculate the number of samples in this investigation with several criteria, companies must announce a complete annual report and sustainability report during the 2018-2022 period.This research measures carbon emissions disclosure on 18 indexes by conducting content analysis [16].Corporate governance variables as independent variables are measured using the ASEAN Corporate Governance Scorecard with a maximum total score of 32.The green strategy variable as an independent variable was measured using content analysis on 18 disclosure indexes [14].Content analysis calculations are performed by giving a value of 1 for each disclosure index made by the company and a value of 0 for items not disclosed by the company.The whole score gotten by the company will be divided by the maximum total items that should be disclosed.The company size variable as a control variable is measured using the natural logarithm of the company's total asset value.1. Descriptive statistics analysis is intended to see the distribution of data used in a study.The mean value describes how big the average value the variable has.The maximum value provides information about the highest value the variable has.The minimum value shows the lowest value for the variable used, while the standard deviation shows the level of spread of data regarding the average value.These values help in providing an explanation regarding the variable being tested.The average value of carbon emission disclosure in the research sample was shown to be 0.474.This value is still low in reducing carbon emissions for companies in Indonesia.Apart from that, the disclosure patterns made by companies show differences.This difference indicates the need for standard rules that companies can refer to when disclosing carbon emissions.Disclosure of carbon emissions has a standard deviation value of 0.190, which is lower than the average of 0.447.This value indicates low mean variability, and the data is considered good.Furthermore, the average value of corporate governance (GCG) is 0.694, green strategy (GS) = 0.546, and company size (FS) = 30,700 (see Table 1).With an average of 0.694, the research sample has fairly good corporate governance.The average green strategy value in the research sample is 0.547, where there are 59 research samples that have a green strategy value greater than the average.This shows that only 56.19% of the research sample has a green strategy above average.Company size has a mean value of 30,700, based on 55 samples that had company size values greater than the average.This illustrates that the company still needs to improve its financial performance so that the size of the company can increase.

Test of Classic Assumption
This research will operationalize the classical assumption test as a condition for using the OLS test on the hypothesis formulated in the previous section.Normality, multicollinearity, heteroscedasticity and autocorrelation tests are four classical assumption testing tools that are commonly used.The normality test results in Figure 1 show data from the Jarque-Bera test of 0.3246 with a probability value of 0.850.The Jarque-Bera value which is greater than alpha 5% indicates that the data used is normally and well distributed, so it is suitable to be tested using a parametric test tool.The multicollinearity test shown in Table 2 comes from the VIF value.Corporate governance VIP value = 1.3119, green strategy VIF value = 1.703, and company size VIF value = 1.5592.The VIF value for all variables used is < 10.This value indicates that there are no multicollinearity problems between the independent variables.After testing multicollinearity using VIF, this research also used a correlational test.Table 3 displays the results of the multicollinearity test on corporate governance and green strategy, namely 0.4685.The results of this second multicollinearity test also show that there are no problems with multicollinearity between the two independent variables.Likewise, testing the correlation between corporate governance variables and company size of 0.3841 also shows that all variables used in this research model do not have problems with multicollinearity.The correlation test value between green strategy and company size also shows that there is no multicollinearity, which is indicated by a value of 0.5859.All results of testing multicollinearity relationships show that there is no correlation between variables that could cause confounding effects in the research model.The Heteroscedasticity test shows that all independent variables have a significant probability value of >0.05: the probability significance value of the corporate governance variable is 0.7356, the probability value of green strategy is 0.2366, and the probability value of company age is 0.8691.This value shows that the data does not have problems with heteroscedasticity, the data is good, and can be tested using OLX ( The test results using the Lagrange Multiplier obtained a Breusch-Pagan cross section probability value of 0.0348.This value indicates that the value is smaller than the probability significance value of 0.05.This value of 0.0348 <0.05 indicates that the random effect model is the best model to use in testing panel data for this research.

Result of Hypothesis Testing
To test the hypothesis of this research, a test was carried out using multiple linear regression using a random effect model.The random effect model is the best model in panel data testing after going through a series of tests required in panel data.This careful test aims to ensure that corporate governance, green strategy, and company size (control variables) are variables that influence carbon emissions disclosure.In other words, this research's multiple linear regression test aims to assess whether corporate governance, green strategy, and company size can be determinants of company activities to reduce carbon emissions.The green strategy has a coefficient value of 0.9560 indicating a positive influence between the independent variable green strategy (GS) on the dependent variable carbon emission disclosure (CED).If the green strategy (GS) variable increases by 1%, then the average carbon emission disclosure also increases by 0.9560.The company size regression coefficient is 0.0327, indicating that there is a positive influence between company size (FS) on carbon Emissions Disclosure (CED).If the company size (FS) variable increases by 1%, then the average carbon emission disclosure will increase by 0.0327.

Testing of Research Model
The results of the F-test in this study are as follows: The model test carried out in this research aims to test the accuracy of the model built for research.in other words, the model test will confirm whether the assumptions used to build the research framework are fixed.In this research, the F test is used to determine the strength of the model between corporate governance, green strategy, and company size on carbon emission reduction activities.Table 9 shows the results of the probability F test (f statistic) of 0.000 which is smaller than the significance value of 5% (0.000<0.05).These results conclude that the model built in this research is good and worthy of being tested on each variable (hypothesis).To measure how much power the model has in explaining independent variability, the Coefficient of Determination Test was carried out.This research uses Adjusted R-Square as a value that will determine the strength of the model in predicting the dependent variable.The sensitivity of the Adjusted R-square, the value of which can increase or decrease when one independent variable is added to the model, is the reason why this study uses this measure to determine the magnitude of the variability of the independent variable relative to its dependent.Based on Table 10, the adjusted R-square value is 0.8160 (81.60%).These results indicate that the variables of corporate governance, corporate strategy, and company size have an effect on the carbon emissions disclosure by 81.60%.Meanwhile, 18.40% carbon emissions disclosure is influenced by variables other than corporate governance, green strategy, and company size.The first hypothesis in this study is that corporate governance has a positive effect on carbon emissions disclosure.Based on the results of the t test that has been carried out on the corporate governance variable, a probability value of 0.0354 <0.05 is obtained.A probability value of less than 0.05 indicates that corporate governance has a positive effect on carbon emissions disclosure.That is, the better the level of corporate governance, the company will disclose higher carbon emissions.The results of multiple linear regression analysis also show that the coefficient value is positive, namely 0.2796, which means that if the corporate governance variable increases by 1%, the carbon emissions disclosure also increases by 0.2796.Table 11 shows the test results of this research model.The corporate governance coefficient value is positive with a probability value of 0.0354 (smaller than 0.05).This value shows that the better governance a company has will determine the company's efforts to reduce the company's carbon emissions.This can be seen from the large number of disclosures of carbon emission reduction activities carried out by companies.These results are the reason for this research to conclude that H1 is supported.The green strategy regression coefficient value is positive with a probability value of 0.000 (smaller than 0.05).This value indicates that the green strategy chosen by the company as one of the strategies implemented within the company has encouraged a reduction in the company's carbon emissions.This result means that H2 is supported, which means the company's green strategy has a positive effect on carbon emissions disclosure.The regression coefficient value on company size is positive with a probability value of 0.0032 (smaller than 0.05).The results of this regression test show that the larger the company size, the better the efforts made by the company in reducing carbon emissions.The conclusion from these findings is that H3 is supported.

Result and Discussion
The research H1 is supported by the coefficient value on corporate governance with a t-statistic of 2.132 and a probability of 0.0354.The comes about of this think about are in line with inquire about which states that good corporate governance has a significant positive effect on carbon emissions disclosure [18].This is because companies with good governance will have control over company performance thereby affecting the level of environmental disclosure.Other research shows that corporate governance, as represented by the number of audit committee meetings, has a positive effect on reporting greenhouse gas emissions.The more actively the audit committee conducts meetings, the more incentives companies have to disclose carbon emissions in annual reports or sustainability reports [19].
Research on governance issues using independent commissioners and gender diversity as a measure of GCG was found to have a positive influence on carbon emissions disclosure [20].Individuals who become independent commissioners in companies represent a good governance mechanism for a company because the task of independent commissioners is to ensure that the company complies with statutory regulations in its business activities to disclose carbon emissions.Therefore, it is important to determine the personnel who should sit on the independent board of commissioners.Ideally independent commissioners come from people who have expertise and educational backgrounds that are in line with the company's core business.His view as an expert who is free from any interests will uphold the pillars of governance with full integrity.In line with the explanations and predictions in stakeholder theory, the responsibility that must be carried out by the board of commissioners is to supervise every decision taken by management so that the company's strategy is in accordance with the wishes of stakeholders.On the other hand, companies that have diversity on the board of directors will include a portion of women in them.This is driven by demands for gender diversity which are thought to influence the decisions of the board of commissioners when making policies and decisions, one of which is when discussing the issue of reducing carbon emissions.In this way, the existence of independent commissioners and gender diversity in companies will encourage companies to manage carbon emissions and disclose them.
The results of statistical tests on the data used in this research and confirmation of previous theory and research can explain that corporate governance can encourage policies that lead to limiting corporate carbon emissions.Data obtained from company disclosures on carbon emission reduction activities shows that good governance tends to have a caring attitude towards the environment which is demonstrated through disclosing a number of activities to reduce carbon emissions.This finding is in line with what is predicted in stakeholder theory that companies should not only prioritize the company's interests in creating profits, but also develop the needs of the community (people) and the environment in which the company operates.The better corporate governance, the better the company's efforts to reduce carbon emissions as a form of responsibility to wider stakeholders.
The second hypothesis formulated in this research states that a green strategy will encourage higher disclosure of carbon emissions.The results of the t test that was carried out obtained a value of 1.494 with a probability of 0.000.These results show the important role of green strategy in reducing corporate carbon emissions.The better the company is in implementing a green strategy, the better the company will take action to reduce carbon emissions.The coefficient value is 0.9560, indicating that when the green strategy increases by 1%, carbon emission disclosure also increases by 0.9560.This research shows that the company's green strategy dominates other variables in determining the company's activities in reducing carbon emissions.The green strategy coefficient value is the highest, compared to governance and company size.
The findings of this research coincide with the findings of previous research which found that green strategies provide encouragement for companies to disclose their activities in reducing carbon emission levels [21].Although there are many reasons for companies to reduce carbon emissions, a green strategy is one of the most prominent ways.The reduction in emissions that has been carried out will motivate companies to reveal their performance through carbon emission disclosures.Green strategy is a strategy that many companies use to reduce the level of risk and anticipate the impact of climate change.Risk IOP Publishing doi:10.1088/1755-1315/1324/1/0120859 management activities and mitigation actions for climate change can be traced to company disclosures [8].
The company's implementation of a green strategy will increase the carbon emissions disclosure [22].The strategy related to the environment carried out by the company is a commitment to use resources productively.Green strategies can help companies to reduce and control emissions that will be disclosed through carbon emission disclosures.Thus, the company will gain the trust of stakeholders through programs that show concern for controlling carbon emissions [15; 23].
Companies that are active in implementing green strategies show companies that care about the environment, so they tend to disclose higher carbon emissions.This result is in accordance with the theory of legitimacy, namely the company implements a green strategy and discloses the results of managing carbon emissions so that they are in accordance with stakeholder expectations.This finding is in line with research results that large companies tend to meet the hopes and expectations of their broader stakeholders [13].

Conclusions, limitations, and suggestions
As the final part of this paper, the conclusions obtained from a series of methodologies that have been carried out in the previous section will be presented.Furthermore, this paper focuses on limitations encountered during the research process.Finally, this paper will also explain several suggestions for further research, one of which is an effort to cover the limitations of this research.

Conclusions
This research succeeded in finding empirical evidence on the influence of corporate governance, green strategy, and company size on the level of carbon emission disclosure in companies in the energy and raw materials sector in Indonesia for the 2018-2022 period.This research operationalizes the final sample of 105 observations from 21 companies over 5 years of observation.Conclusions that can be explained from the test results are described in the following section.a) Corporate governance was found to influence the extent of carbon emissions disclosure in energy and raw materials sector companies in Indonesia.This finding shows that companies with good governance will also manage carbon emissions well, and this can be seen in disclosing information on activities to reduce the company's carbon emissions.b) A green strategy is a strategy that can drive efforts to reduce a company's carbon emissions.
These results show that companies that have a green strategy in carrying out their operational activities will manage carbon emissions and disclose more carbon emissions information.c) Company size is used as a control variable (because it has been proven to be a predictor of reducing carbon emissions) to increase the accuracy of research results, namely the influence of corporate governance and green strategy on carbon emissions disclosure.

The Limitations
In conducting research, researchers realize that there are limitations in research as follows: a) One of the limitations in this research is in terms of variable measurement: green strategy, corporate governance, and carbon emission disclosure.This research uses content analysis, so we give a weight = 1 if the company discloses the item per disclosure index, and a weight = 0 if the company does not disclose.In deciding on these very diverse disclosures, of course we have prioritized the researcher's professional income, but there will still be subjectivity in this assessment.b) The number of energy and raw materials sector companies used as research samples is relatively small.The results of research that uses big data may show results that have better external validity.
a) Based on the limitations and results of this research, this research provides suggestions for future researchers to use big data, expand the number of research samples over a wider research period.This is intended to develop this research and to provide a more representative picture of the influence of corporate governance and green strategy on carbon emissions disclosure.Future researchers can also add other independent variables such as R&D intensity, financial slack, and green innovation to find out other factors that will influence carbon emissions disclosure.b) The results of this study imply that green strategies play a very strong role in reducing a company's carbon emissions.Governance also plays an important role, although not as strong as the implementation of green strategies.However, good governance should play a role in encouraging the implementation of a company's green strategy.

Table 1 .
Result of descriptive statistics

Table 4 .
Test of Heteroscedasticity

Table 4 )
The autocorrelation test results shown with Durbin Watson are 1.9846.With a level of α = 0.05, n (number of observations) = 105, k (independent variable) = 3, the dl value is 1.6237, the du value is 1.7411, the 4-du value is 2.2589, and 4-dl value is 2.3763.The Durbin Watson test result value of 1.9846 is du and 4-du 1.7411 < 1.984574 < 2.2589, which indicates that there is no autocorrelation in the data used, the data is good, and passes the autocorrelation test.Hypothesis Testing (Regression test)To determine the regression model that will be used as a testing model in this research, Chow, Hausman and Lagrange Multiplier tests were carried out.This test aims to determine which model is most appropriate in testing panel data.There are three tests that can be selected in panel data testing, namely (1) common effect model, (2) fixed effect model, and (3) random effect model.To determine the best model, the Chow test, Hausman test and Lagrange Multiplier test were carried out.

Table 5 .
Result of Chow TestTo determine whether the Common Effect Model or Fixed Effect Model has the best predictions, the Chow test is carried out.The Fixed Effect Model will be selected as a test tool for panel data if the p value < α.The Common Effect Model will be chosen as the best tool for estimating panel data if p >α. Table5shows the results of the Chow test which shows that the cross-section probability value of the Chi-Square test results is 0.0014 <0.05 (smaller than the value of 0.05), so it is concluded that the best test model for panel data is using the Chow test model.fixedeffectsmodel.The next test will be carried out to choose the best model between Random Effect Model or Fixed Effect Model.Using the Hausman test, select Random Effect Model if p value > α, and select Fixed Effect Model if p value < α.Table6shows a random cross-section value of 0.3398.This value shows that the Random Effect Model is the best model for testing panel data (p > 0.05) according to the Hausman test.

Table 6 .
Hausman Test ResultThe selection of the best model between the Random Effect Model and the Common Effect Model is the Lagrange Multiplier Test (see Table7).The model selection criteria use probabilistic value indications.If the p value < a then the model chosen for testing panel data is the random effect model.Meanwhile, if the p value > a then the common effect model is the model chosen for panel data testing.

Table 7 .
Lagrange Multiplier Test Result

Table 8 .
Result of Coefficient Testing From Table8which presents the results of coefficient testing, the equation is formulated as follows: CED = -1.2431+ 0.2796 GCG + 0.9560 GS + 0.0327 FS + e Some explanations of the results of the regression equation above.If all the variables in this research model (corporate governance, green strategy, and company size do not change or change at 0%), the average carbon emissions disclosure will decrease by 1.2431.The decline in carbon emission reduction activities is certainly not good news.The regression coefficient value for corporate governance is 0.2796, indicating a positive influence between corporate governance (CGC) and Carbon Emissions Disclosure (CED).If the corporate governance (GCG) variable increases by 1%, then the average carbon disclosure will increase by 0.2796.

Table 9 .
Test of Research Model

Table 10 .
Test of Determination Coefficient

Table 11 .
Individual Significance Tests Result