Abstract.
Whether investors take into account the company's information
related to carbon emission mitigation and the company's environmental
ranking in their investment decisions is an interesting research avenue. The
objective of this study is twofold. First, it tests whether the level of carbon
emissions disclosure differs by industry sector. Second, it examines whether
carbon emission disclosures as reported by companies and their
environmental performance affect the value of the firm. This study utilizes
102 companies in 2022 that are included in highly polluting industries as a
sample, which is divided into 4 different sectors: consumer goods, energy,
basic industry, and miscellaneous industry. The results of the analysis of
variance (ANOVA) test reveal that the extent of carbon emissions reporting
is different across industry sectors. Meanwhile, the multivariate regression
results reveal that carbon emission disclosures positively influence the value
of the firm. Environmental performance, however, does not impact firm
value. This study informs the company's management that promoting higher
levels of carbon emission mitigation and reporting would boost the
company's reputation, which would in turn increase its value.