THE EFFECT OF CARBON EMISSION DISCLOSURE AND PROFITABILITY ON FIRM VALUE IN ENERGY SECTOR COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE DURING THE 2022–2024 PERIOD
Keywords:
Carbon Emission Disclosure, Firm value, Profitability, LeverageAbstract
Climate change and rising carbon emissions are pushing companies, especially those operating in the energy sector, to increase environmental transparency and sustainability practices. Carbon Emission Disclosure (CED) has emerged as an important mechanism to communicate a company's environmental responsibility to stakeholders, while profitability remains a key indicator of financial performance that influences investor decisions. This study aims to examine the effect of carbon emission disclosure and profitability on firm value in energy sector companies listed on the Indonesia Stock Exchange during 2022–2024, with leverage as a control variable. The research uses a quantitative approach, utilizing secondary data collected from annual reports and sustainability reports. Purposive sampling techniques were used to select the sample, resulting in 141 data observations. Carbon emission disclosure is measured using the Carbon Disclosure Project (CDP) index, profitability is represented by Return on Assets (ROA), company value is measured using Tobin’s Q, and leverage is measured using the Debt-to-Asset Ratio (DAR). The data is analyzed using statistical software with multiple linear regression. The results show that carbon emission disclosure does not have a significant effect on company value, indicating that environmental disclosure has not yet become a main consideration for investors in assessing the market value of energy companies. On the other hand, profitability has a positive and significant effect on company value, showing that companies with stronger financial performance tend to receive higher market valuations. Leverage doesn't have a significant effect on firm value. This finding highlights the importance of profitability as a determinant of firm value and shows that environmental disclosure mainly serves as a transparency mechanism rather than a direct driver of market value. This study contributes to the literature on sustainability reporting and corporate finance by providing empirical evidence from the energy sector in Indonesia.
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