The Determinants of Environmental Disclosure in Companies in Indonesia

The purpose of this study is to identify the factors that influence environmental disclosure. The study population is 156 companies consisted of companies in the agricultural sector, the consumer goods industry sector, and the basic & chemical industry sector which were listed on the Indonesia Stock Exchange and participated in PROPER 2014-2018. The purposive sampling method was used to determine the research sample in order to obtain 26 company samples or 130 units of analysis. The analysis technique in this study uses multiple linear regression analysis. The results of this study indicate that the level of environmental disclosure in the three corporate sectors in Indonesia is classified as low, due to the absence of standard guidelines for conducting environmental disclosure, so it is still voluntary. The results also show that the variables of board commissioners’ size, size of the audit committee, environmental certification, profitability, and company size have a significant positive effect on environmental disclosure, while leverage has no effect on environmental disclosure. With the low level of corporate environmental disclosure in Indonesia, it is hoped that the government can establish standard, precise, and mandatory guidelines so that companies can further increase information regarding environmental disclosure.


INTRODUCTION
The problem of environmental damage by industrial companies in Indonesia is the centre of attention at nowadays. The environmental damage caused by the waste resulting from the operational activities of industrial companies has greatly caused restlessness of the people living around it. Environmental pollution caused by company activities creates pressure from various parties, especially the public, on companies to provide transparent information regarding environmental activities.
The Ministry of Environment and Forestry through the Directorate General of Law Enforcement in 2015-2018 has handled public complaints regarding cases of environmental damage through direct and indirect complaints with total 2,677 cases. Meanwhile, a survey conducted by the Indonesian Forum for the Environment (WALHI, 2014) states that environmental cases are the cause of the lack of reporting on social and environmental responsibility.
The case of environmental pollution caused by industrial activities in Indonesia occurred at PT Ultra Jaya Milk, which is located in Gadobangkong Village, West Bandung Regency. In 2017, the residents of Gadobangkong Village felt uneasy because the smell of milk waste was getting stronger every day, resulting in the water supply provided by the residents containing waste and causing itching, shortness of breath, and nausea. One of the factors that caused smell during production was a technical blackout so that the production was disrupted and affected the wastewater treatment plant (IPAL). The company received demands from the local residents so that there would be no more pungent odour and to clean the environment around the factory site. After a few months, PT Ultra Jaya Milk finally signed the Integrity Fact which states that the company will comply with and carry out the obligations stated in the license related to the business or activity it carries out. If it violates it is willing to be subject to sanctions in accordance with the applicable laws and regulations. Finally, PT Ultra Jaya maximized the IPAL processing by repairing damaged equipment and replacing it with new tools so that the odour of waste does not occur again (JabarEkspres.com).
This environmental problem has caused public upheaval to demand that companies be transparent about their activities, especially in the environmental sector as a form of corporate responsibility. If the company's responsibility is still lacking, then the governance mechanism is still less good. Thus, a well-organized corporate governance mechanism (GCG) is needed as a tool to provide information about company business activities that have the potency to have a good impact on the environment and society.
The regulation regarding environmental disclosure in Indonesia is contained in Government Regulation Number 47 of 2012 specifically to regulate disclosure of social and environmental responsibility Article 6 explains that the implementation of social and environmental responsibility is contained in the company's annual report and is accounted for in the GMS (General Meeting of Shareholders). Companies usually do environmental disclosures through corporate social responsibility in their annual reports and sustainability reports. In addition, in the Financial Services Authority Regulation Number 29 / POJK.04 / 2016 concerning the Annual Report of Issuers or Public Companies Article 4 states that the annual report must contain a description of the company's activities regarding social and environmental responsibility towards the interested parties. Ghozali and Chariri (2014:430) revealed that environmental disclosure is a process used by companies to disclose information related to company activities and their impact on social community and environmental conditions. Social and environmental disclosure practices are managerial tools used by companies to avoid social and environmental conflicts and can be viewed as company accountability to the public to explain social and environmental impacts caused by the companies, both good and bad impacts.
Environmental disclosure has mandatory and voluntary nature. Mandatory nature is due to the existence of various regulations that require companies to conduct social and environmental responsibility disclosure, such as the regulations regarding the obligation to submit environmental information in the Corporate Social Responsibility (CSR) report in the company's annual report and sustainability reports. Environmental disclosure is also voluntary, although the standards of social and environmental responsibility disclosure have been developed a lot, but there are no standard guidelines regarding environmental information disclosure standards issued by the Indonesian government. Thus, there are still companies in carrying out environmental disclosure voluntarily and the level of disclosure is still low.
The low level of environmental disclosure in Indonesia is proven by the results of the research conducted by Solikhah & Winarsih (2016) ;Cho et, al. (2015) and Tadros (2019) which show that the level of environmental disclosure quality in companies in the mining, energy, chemical, pharmaceutical, cosmetic, and food and beverage sectors listed on the IDX in 2011-2013 has reached 49% but not yet reached 50%. This result is due to in Indonesia there are no definite guidelines for reporting company environmental disclosures. Although there have been environmental disclosure guidelines issued by GRI, there are still many companies in Indonesia that report environmental disclosures differently according to the complexity of each company. Ghozali and Chariri (2014:424) stated that failure to provide adequate disclosure could result in market failure. Therefore, the government forces companies to carry out sufficient social and environmental disclosure for market success. This is also supported by investors who want an increase in the value of the company; even 35.7% of investors surveyed want an audit of environmental disclosures carried out by the company to ensure that the company given the investment does not experience market failure in the future.
In accordance with agency theory, the investors as the principals want accurate reporting to ensure the safety of their funds. However, for the management who acts as an agent, this is an additional burden, besides the agent must concentrate on optimizing its financial performance, management must also ensure that there is no environmental impact from the company. This is caused the level of sustainability report disclosure is still low.
In line with that, the existence of a board of commissioners can give strong monitoring on managers' performance to carry out more their responsibilities in the company, for example, to carry out responsibility for environmental disclosure. The size of the board of commissioners has adequate strong influence on environmental disclosure. The research conducted by Solikhah & Winarsih (2016), Mutmainah &Indrasari (2019), andFasikhah et al. (2018) show that the size of the board of commissioners has a positive and significant effect on environmental disclosure. Meanwhile, research conducted by Supatminingsih & Wicaksono (2017), Odoemelam & Regina (2018), Wardani & Haryani (2018), and Dewi (2019) state that the size of the board of commissioners has no significant effect on the company's environmental disclosure.
Another factor that is assumed to affect environmental disclosure and reduce gaps in information between principals and agents is audit committee. Audit committee can provide a professional and independent opinion regarding company reports such as social and environmental responsibility reports and other matters submitted by the board of directors to the board of commissioners (Dewi : 2019). Research conducted by Sari, et al (2018) and Dewi (2019) state that the size of audit committee has a significant positive effect on corporate environmental disclosure. The results of the research are inversely proportional to Mutmainah & Indrasari (2019), Wardani & Haryani (2018), and Kurniawan (2019) that the size of audit committee has no effect on corporate environmental disclosure.
The Environmental Disclosure is not only needed by investors, but is also needed by other stakeholders as a consideration for decision-making. One that attracts the attention of stakeholders is the existence of environmental certification for company. This certification will attract the attention of stakeholders who need all information about the company, including information on environmental disclosure.
Armed with environmental certification (ISO 14001), the level of corporate environmental disclosure will also be high, so that stakeholders will believe that the company has committed to maximizing its responsibility towards stakeholders because the company has implemented concern for the environment. Research conducted by Dincer (2011) and Rahmawati & Budiarti (2018) provide evidence that environmental certification (ISO 14001) has a significant positive effect on environmental disclosure. However, it is different from the research conducted by Oktariani & Meutia (2018) that environmental certification (ISO 14001) has no effect on corporate environmental disclosure.
Apart from the factors above, corporate internal factors also influence corporate environmental disclosure. In line with legitimacy theory, profitability is an evidence that a company has a high source of funds to respond to pressures and demands from the public to be more concerned about environmental issues by making environmental disclosures, so that the company is easier to obtain legitimacy from the community. Solikhah (2019) show that profitability has no significant effect on corporate environmental disclosure.
Company size also has a fair strong relationship with environmental disclosure information. Large companies tend to have high social responsibility as well. Large companies also tend to show their concern for the environment in order to get a good image on the side of stakeholders. Research results by Burgwal & Oliveira (2014) (2019) state that leverage has no effect on environmental disclosure.
Some of the studies above show that there are still gaps (inconsistencies) in research results. For this reason, the authors feel called to examine further by trying to make a new model as originality in this study, which combines the independent variables of the previous research (board of commissioners' size, audit committee size, environmental certification, profitability, company size and leverage) in a new model in order to obtain empirical evidence as a factor for the company's environmental disclosure.
The large number of members of the board of commissioners has a role in conducting more effective monitoring and has a strong enough influence on management performance in terms of environmental responsibility disclosure. Agency theory states that board of commissioners is considered to become a high internal control mechanism that is charge of providing strong monitoring on management performance in order to carry out obligations accordingly, such as carrying out corporate environmental disclosure as a form of transparency to its stakeholders. In line with research conducted by Ofeofbu (2018) Agency theory which states that there is a miss of information between principal and agent can be bridged by audit committee as the supervisor of the performance from company management. The large number of audit committee size in the company is expected to contribute to the internal control of the company so that it can improve more effective supervisory function and control quality for management in delivering environmental disclosure information that is usually included in annual reports and sustainability reports. Agency theory states that the size of audit committee can reduce agency problems, because the large number of audit committee members can optimize the company's supervision and control, especially regarding the delivery of information to stakeholders. In line with research conducted by (Sari et. al, 2018); (Dewi, 2019); Muttakin (2015) and Ashfaq & Rui (2019) that there is a positive and significant relationship between the size of board of commissioners and environmental disclosure.
H2 : The size of audit committee has a significant positive effect on environmental disclosure.
Environmental certification is obtained for the company's compliance with the implementation of environmental management standards. Environmental certification is proxied by ISO 14001 certification. Companies that have obtained environmental certification (ISO 14001 certification) will indicate that the company has carried out good environmental management and environmental performance, so that it is reflected that the company is conducting extensive environmental disclosure. Legitimacy Theory states that companies that have ISO 14001 certifications indicate that the companies have complied with applicable environmental standards, so that they carry out more environmental disclosure which is extensive with the aim of gaining legitimacy from the community. The results of research conducted by Dincer (2011);Ezhilarasi (2017); Tadros (2019) and Rahmawati & Budiwati (2018) state that there is a significant positive relationship between environmental certification (ISO 14001 certification) and environmental disclosure.

H3: Environmental certification has a significant positive effect on environmental disclosure
Herman & Saleh (2018) stated that high profitability, then the company achieves high profit margins as well, so that managers are motivated to disclose more environmental information to show the company's reputation to consumers, shareholders, investors and other stakeholders. In accordance with legitimacy theory, companies with high profitability indicate that the resources they have are getting bigger so that they get demands from the community to make environmental disclosures in order to gain legitimacy and create a positive image from the community. The results of the research conducted Dincer (2011)

H4: Profitability has a significant positive effect on environmental disclosure
The higher the total assets of the company, the company can be categorized as a large company. The larger the size of the company, the more information is published regarding environmental disclosure as evidence of the transparency of large companies so that they are more attractive to investors (Purnama, 2018). Stakeholder theory states that large companies have many stakeholders to support the sustainability and success of the company, so that the larger the size of the company the environmental disclosure information that is submitted to stakeholders will be wider and more transparent. The higher the amount of company assets financed by creditors, the higher the company's responsibility for disclosing information related to company performance. Thus, the company will be more careful in disclosing the environment completely and extensively in its annual report. Stakeholder theory states that companies that have high leverage can be motivated for more and more extensive environmental disclosure to stakeholders, especially creditors. The result of the research is in accordance with the research conducted by Oktariani & Muetia (2016)

METHODS
The research sample was selected using purposive sampling method and obtained 26 companies with an observation period of 5 years resulting in analysis units of 130 companies. Based on the purposive sampling technique, it can be seen the criteria for determining the sample in Table 1.
The dependent variable in this study was environmental disclosure, there were six independent variables, namely the size of board of commissioners, audit committee size, environmental certification, profitability, company size, and leverage. The operational definitions of the dependent variable and independent variables are shown in Table 2. Companies that did not publish financial reports (annual reports) or sustainability reports and provide environmental disclosure information for the 2014-2018 period.
Agricultural sector companies, consumer goods industry sector, and basic & chemical industry sector that did not follow PROPER during 2014-2018.
Agriculture sector companies, consumer goods sector, and basic & chemical industry sectors that followed PROPER but had negative profitability (Loss).

5.
Companies that did not publish financial reports (annual reports) in rupiah (Rp).
(11) 26 Total Sample 26 Analysis Units 26 x 5 years 130 Source: Secondary data processed, 2020 The number of members of the audit committee in a company is at least 3 (three) members from independent commissioners and parties from outside the issuer or public company. The data analysis methods in this study included descriptive statistical analysis, inferential statistical analysis (classical assumption tests in the form of normality, multicollinearity, autocorrelation, and heteroscedasticity tests, model feasibility test, multiple linear regression analysis and hypothesis testing). The researchers in analyzing the data used SPSS version 21. The equation of multiple linear regression models in this study. + e ........................................ (1)

RESULTS AND DISCUSSIONS
The test results prove that the average level of environmental disclosure in the agricultural sector companies, the consumer goods industry sector, and the basic & chemical industry sector experiences differences and is classified as still low, which is below the value of 50%. The highest level of ED is occupied by companies in the basic & chemical industry sector at 0.4441 or 44.41%. The second rank is THE agricultural sector companies with the ED level of 0.4220 or 42.2%. The third rank of ED level is in companies in the consumer goods industry sector at 0.3931 or 39.31%. This is since in Indonesia there are no definite guidelines for reporting the environmental performance of companies so that there are still many companies that report environmental performance differently by adjusting the complexity and policies of each company and using different environmental disclosure guidelines, although many companies have used the guidelines from GRI.
The results of descriptive statistical analysis in this study have the objective of describing the research data based on the minimum value, maximum value, average (mean), and standard deviation. Table 3. is the results of the descriptive statistical analysis test of the environmental disclosure, the size of the board of commissioners, the size of the audit committee, environmental certification, profitability, company size, and leverage.
The result of the classical assumption test aims as a certain condition before testing the hypothesis, such as the normality test using Kolmogorov-Smirnov (K-S) test shows the asymp. sig result of 0.536> a significance value of 0.05 so that the research data is normally distributed. The multicollinearity test shows that all variables have a VIF value below 10 and a tolerance value greater than 0.10 so that there are no symptoms of multicollinearity. The result of the autocorrelation test using Durbin Watson value with a significance level of 0.05 shows a DW result of 1.973, located between du <d <4-du or 1.8110 <1.973 <2.189 so that the result implies the absence of positive or negative autocorrelation symptoms. The heteroscedasticity test uses Glejser test. The result of the analysis shows that the significance values of all variables are greater than the significance level of 0.05 so that there are no symptoms of heteroscedasticity. 130 Source : Secondary data processed, 2020 The result of the model feasibility test with simultaneous significance test (F statistical test) shows that the result of the F count value is 19.534 (positive)> F table 2.17 and the significance value is 0.000 <significance 0.05. Thus, the variables of size of the board of commissioners, audit committee size, environmental certification, profitability, company size and leverage simultaneously or jointly affect environmental disclosure and are feasible for use in the research. The result of the coefficient of determination test (adjusted R 2 ) of 0.463 indicates that the independent variables of size of the board of commissioners, audit committee size, environmental certification, profitability, company size and leverage have effect on environmental disclosure by 46.3%, the remaining 53.7% is explained by other factors outside the model in this study. The results of the multiple linear regression equation and the results of hypothesis testing are in table 4.  The Effect of Board of Commissioners Size on Environmental Disclosure Table 4 shows that the size of the board of commissioners has a significant positive effect on environmental disclosure. The result is in line with agency theory. The large number of boards of commissioners can be a high internal control mechanism that is charge of providing strong and effective monitoring on management performance to carry out responsibilities which are more specific in environmental disclosure. The result of this study is supported by Solikhah & Winarsih (2016); Mutmainah & Indrasari (2019);and Fasikhah et al (2018) which state that the size of the board of commissioners has a significant and positive effect on environmental disclosure. However, the result of this study is different from Supatminingsih & Wicaksono (2016), Wardani & Haryani, (2018);Oedemelam & Regina (2018);and Dewi (2019).

The Effect of Audit Committee Size on Environmental Disclosure
The second hypothesis states that the size of the audit committee has a significant positive effect on environmental disclosure. The result of the analysis shows that the significance value of the audit committee size is 0.036 <0.05 in a positive direction, thus it implies that the audit committee size variable has a positive and significant relationship to environmental disclosure. The result is in line with agency theory. The size of the audit committee can reduce agency problems since it improves the supervisory function and the quality of control which are more effective for management in conveying environmental disclosure information that is usually stated in the company's CSR reports. The greater the number of audit committees in a company, the wider the company's environmental disclosure will be. In line with research conducted by Sari et al. (2018); Ashfaq & Rui (2019) and Dewi (2019) which state that the size of the audit committee has a positive and significant effect on environmental disclosure. Still, it is different from the research results of Wardani & Haryani (2018); and Kurniawan (2019) which state that there is no effect between the two.

The Effect of Environmental Certification on Environmental Disclosure
The third hypothesis (H3) states that environmental certification has a significant positive effect on environmental disclosure. The result of the analysis shows that the significance value of the environmental certification variable is 0.000 <0.05 in a positive direction. Thus, the result proves that the environmental certification variable has a significant positive effect on environmental disclosure. In line with legitimacy theory that a company with a good level of environmental management has ISO 14001 certificate, then in carrying out environmental disclosure it is more extensive since the company's values have been harmonious with the values in society and the company has fulfilled environmental management properly to attract sympathy and legitimacy from the community. Supported by research conducted by Dincer (2011) and Rahmawati & Budiwati (2018) state that environmental certification has a positive and significant effect on environmental disclosure.

The Effect of Profitability on Environmental Disclosure
The fourth hypothesis states that profitability has a significant positive effect on environmental disclosure. The result of the analysis shows that the significance value of the profitability variable is 0.001 <0.005 in a positive direction, so it is concluded that profitability has a significant positive effect on environmental disclosure. In line with legitimacy theory that high profitability means that the company has a high source of funds to respond to pressures and demands from the public to be more concerned about environmental issues by conducting environmental disclosures so that it will be easier for the company to gain legitimacy from the community. Supported by research of Dincer (2011); Solikhah & Winarsih (2016); Ismail et al (2018) and Nurhayati & Kurniati (2019) state that there is a positive and significant effect between profitability on environmental disclosure.

The Effect of Company Size on Environmental Disclosure
The fifth hypothesis states that company size has a significant positive effect on environmental disclosure. The result of the analysis shows that the significance value of the company size variable is 0.000 <0.05 in a positive direction. The result can be concluded that the company size variable has a positive and significant effect on environmental disclosure. Supported by stakeholder theory which states that large companies have more stakeholders than small companies, then large companies will provide the information regarding environmental disclosure with the best possible, transparency to be more responsible and satisfy their stakeholders.

The Effect of Leverage on Environmental Disclosure
The sixth hypothesis states that leverage has a significant positive effect on environmental disclosure. The result of the analysis shows that the significance value of the leverage variable is 0.420> 0.05 in a negative direction. The result implies that leverage has no effect on environmental disclosure. It is not in line with stakeholder theory due to a high level of leverage tends to allocate resources owned to pay off debts compared to reporting environmental disclosure information which is voluntary so that the companies prefer to report current earnings higher so as not to violate agreements with creditors. This research is in line with the research by Herman & Saleh (2018); Purnama (2018); Kurniawan (2019); and Nurhayati & Kurniati (2019) which state that leverage has no effect on environmental disclosure.

CONCLUSIONS
The results of the research show that the size of the board of commissioners, the size of the audit committee, environmental certification, profitability and company size have positive and significant effect on environmental disclosure, while leverage has no effect on environmental disclosure. Suggestion for companies is to improve further environmental disclosure as a form of corporate responsibility and transparency towards stakeholders for the sustainability and positive image of the company in the long term. Meanwhile, for the Indonesian government can issue standard and legal guidelines to guide companies in conducting environmental disclosures.
This research has a high element of subjectivity in measuring the index of environmental disclosure. The next researcher would be better of using the GRI Standards launched in 2017, especially on environmental topic standards (the 300 series of the GRI standards which have 7 standard aspects) that have been set Indonesian government to know more about accountability and transparency in achieving sustainable development.
This study has a very small number of samples in each company sector. The number of samples is only 4 agricultural companies and 12 companies in the consumer goods industry sector. The next researcher would be better off using high profile companies, namely companies which the operational activities are very close to nature, thus showing a better level of concern for the environment.