Disclosure Effect of Carbon Emission and Corporate Social Responsibility to Financial Performance

The objectives of this research are to examine the effect of Carbon Emission Disclosure and Corporate Social Responsibility Disclosure to financial performance. The objects of this study are consumer goods companies listed in Indonesia Stock Exchange (IDX) for the period 2015-2017. Panel data used in this study are unbalanced panels because a criteria is used for the targeted sample of consumer goods that achieve net profits during each study period so that not all companies have complete data for up to three periods. Total sample in this research are 92 companies, selected with purposive sampling, and analyzed by using multiple regression. The data used in this study are secondary data. The statistical sofware used is SPSS 24. The result of this research indicates that (1) Carbon Emission Disclosure had a positive significant effect on financial performance (2) Corporate Social Responsibility Disclosure had no significant effect on financial performance.

only transparency and does not explain the company's strategy to take effective steps to reduce carbon emissions so as not to attract investors attention, which does not automatically apply to the financial performance of the company.
Another concrete form in companies applying the 3P concept is social performance. nowadays, the company needs to pay attention to the role of stakeholders, so that the company must be able to achieve harmonization between the company and the stakeholders by developing a corporate social responsibility program. According to Crowther (2008), Corporate Social Responsibility (CSR) is a way in which companies integrate their focus on social and environmental issues into their respective business activities as a form of voluntary stakeholder interaction.
In Law Limited Liability Company Number 40 of 2007 in Article 66a (2c) states that there are obligations that must be implemented by all companies in the implementation of social and environmental responsibility in their annual reports. Article 74 (1) then states that the company must assume social and environmental responsibility in its operations related to natural resources. Paragraph (2) states that this requirement can be calculated as a business expense by paying attention to compliance and fairness. Paragraph (3) states that companies that do not fulfill the obligations of paragraph (1) may be subject to sanctions in accordance with applicable laws and regulations. In addition, paragraph 4 states that public policies have governed social and environmental responsibility.
According to Angelia and Suryaningsih (2015), companies that make CSR disclosures can have a positive impact on the company, as the company can increase the trust and reputation of the community in the products offered by the company by conducting CSR activities so that the profits made by the company are higher. In accordance with the research of Suciwati et al. (2016) states that increasing an entity's CSR disclosure will increase its return on investment and reduce its disclosure, as well as reduce its return on investment. According to research (Yaparto, 2013), companies that fulfill their responsibilities have competitive weaknesses due to unnecessary costs that impact shareholder value, thereby reducing the company's bottom line.
Based on the description of the background above, the author assumed that research needs to be done to see whether there is an influence of carbon emission disclosure and corporate social responsibility disclosure on the financial performance of consumer goods companies in Indonesia.

Literature Review and Hypothesis
The theory of legitimacy states that companies try to ensure that the activities or activities they perform comply with the limits and standards of the society in which the company operates. Legitimacy can be seen as a way to harmonize the perception of actions of the desired entity in accordance with norms, values, and beliefs (Angelia and Suryaningsih, 2015). To close the legitimacy gap, companies need to identify activities under their control to gain legitimacy for the business. Activities to disclose environmental and social aspects may reflect the legitimacy of the company to society. The existence of a theory of legitimacy improves the positive image of the company when it receives the expected results of the business so that there are no demands from the public. Legitimacy, therefore, provides an overview of the company's business survival benefits derived from the performance of the business itself.
Stakeholder theory states that a company is not an entity that acts only for itself but must provide benefits to its stakeholders (shareholders, creditors, consumers, suppliers, government, society, analysts, and other parties). Thus, the existence of a company is strongly influenced by the support of stakeholders for the company (Ghozali and Chariri, 2008). Gray et al. (1995) state that the survival of a business depends on the support of stakeholders and that assistance must be sought for the company's activities to seek that support. The more powerful the stakeholders are, the greater the company's adaptation efforts. Social disclosure is considered as part of the dialogue between the company and its stakeholders. Based on stakeholder theory, the company will voluntarily choose to disclose information about environmental and social performance, and not encourage stakeholders to meet the expectations of having a more comprehensive activity and its impact on the social and environmental conditions of the organization Expect community.
According to Godfrey (2011), agency theory explains the existence of a relationship between agents and clients to achieve maximum business goals. The main principle of this theory is that there is a working relationship between the principal (investor) and the principal (manager) that enters into an agency relationship in a contract in which one or more clients involve other persons (agents) to perform certain services on behalf of to provide those who partially include authority in decision-making (Jensen and Meckling, 1976). This agency theory assumes that all persons are acting in accordance with their own interests and that clients wish to receive information on management activities related to the funds made available to the company by requesting an accountability report from the client for the assessment management performance is used. However, this leads to a conflict of interest between the principles and the agent, as the agent does not always act in accordance with the client's wishes and thereby incur agency costs. There are two factors in the agency relationship that affect the company's social and environmental information, namely cost and contract cost monitoring (Mustafa and Handayani, 2014).

Development of Hypothesis
In the discussion of legitimacy theory, companies must recognize activities under their control to gain legitimacy. Environmental activities in this case by disclosing carbon emissions can be used as a form of voluntary information transparency of the company, which has the effect of improving the positive image of the company as stakeholders see the efforts being made to protect the environment for the company operational activities and this is going to increase the profits of the company to maintain the sustainability of the company. According to Sanchez & Lorenzo (2012), companies that do little innovation in their business activities are trying to be environmentally friendly by showing carbon emissions to increase their profits. According to Hermawan et al. (2018), carbon emissions disclosure has an impact on public confidence and legitimacy, which has an impact on increasing profits. Based on this, the hypothesis that is built is: Ha1: The disclosure of carbon emissions has a positive impact on financial performance.
The stakeholder theory explained that the company not only works for itself but also has to provide benefits to stakeholders. In this case, the company's participation in environmental and social activities impacts the company's financial performance as the company offers products that can be bought by the community. It is considered something that brings improvements to the community. According to Angelia and Suryaningsih (2015), companies that make CSR disclosures can have a positive impact on the company, as the company can increase the trust and reputation of the community in the products offered by the company by conducting CSR activities so that the profits made by the company are higher. In accordance with the research of Suciwati et al. (2016) states that increasing an entity's CSR disclosure will increase its return on investment and reduce its disclosure, as well as reduce its return on investment. Based on this, the hypothesis that is built is: Ha2: The disclosure of corporate social responsibility has a positive impact on financial performance.

Research Methodology
The sample used in this study covers all industrial consumer goods companies listed on the Indonesian Stock Exchange (IDX) in 2015-2017. The panel data used in this study is an unbalanced panel because one of the criteria for a special purpose sample is a consumer goods company that generates a net profit over each study period, so not all companies have complete data for up to three periods, Thus, in 2015, the total number of companies used was 32 companies, 31 companies in 2016 and 29 companies in 2017.
Carbon Emissions Disclosure (CED) and Corporate Social Responsibility (CSRD) disclosure are measured using dummy variables, 1 for companies reporting in the Annual Report and/ or Sustainability Report, and 0 for non-companies provide information in the Annual Report and/ or Sustainability Report. For each item specified in a company report with a value of 1, a total of the company's total is 18 (CED) and 84 (CSRD). Then the acquisition value of each company is divided by the total. Based on the reference calculation of the CSR Disclosure Index by Angelia and Suryaningsih (2015), the following index formula also for Carbon Emission Disclosure.

Analysis and Discussion
In the following, the number of statements in the Sustainability Report (SR) of the consumer goods companies during the investigation period: The sector of the consumer goods industry has the highest score among 2 other sectors in manufacturing companies with a total of 39 companies. There are 3 (PT Multi Bintang Indonesia Tbk, PT Gudang Garam Tbk, and PT Unilever Indonesia Tbk) companies that issue sustainability reports or only 7, 7% because the industry in consumer goods has more initiative than the other two sectors in manufacturing companies to quality and to express responsibility for the products they market. In total, there are 39 consumer goods industry and only 3 companies that publish sustainability reports, or just 7.7%. This is because there is no compelling requirement that requires each company to disclose the sustainability report, as well as the costs and benefits that the company still considers.  Table 3 summarizes the descriptive statistics of 92 consumer goods firms during 2015-2017 and shows the comparison of variables among the firms. Return On Asset (ROA) is greatly lower than in other variables with a total minimum value 0,0020 owned by PT Mustika Ratu Tbk for the period 2015. Carbon Emission Disclosure (CED) is greatly higher than in other variables with total maximum value 0,9444 owned by PT Multi Bintang Indonesia Tbk and PT Unilever Indonesia Tbk for the period 2015 and 2016. The average value (mean) for the Corporate Social Responsibility Disclosure (CSRD) is greatly higher than in other variables with total mean value 0,3889. Then, the value of standard deviation for Return On Asset (ROA) with total value 0,1506, Carbon Emission Disclosure (CED) is greatly higher than in other variables with total value 0,1754 and the Corporate Social Responsibility Disclosure (CSRD) is greatly lower than in other variables with total value 0,1324. CED 2,310 ** CSRD 2,310 ** Tolerance: CED 0,433 *** CSRD 0,433 *** Autocorrelation Test -Run Test: Significant = 0,675 * Heteroskedasticity Test -Glejser: Significant: CED 0,707 * CSRD 0,620 * Notes: *p < 0,05 **VIF<10 ***Tolerance>0,1 (Source: Data Processed Using SPSS 24) From the above table 4, the regression model has passed classical assumption tests with α=5% except for multicollinearity tests test must be lower than 10. The results of the normality test show the Kolmogorov Smirnov significance of 0,200 greater than 0,05 so that the data is normally distributed. Based on the results of multicollinearity tests all independent variables (CED and CSRD) have VIF values smaller than 10 and the tolerance values higher than 0,1, it can be concluded that multicollinearity does not occur. Autocorrelation testing carried out with run test can be stated that there is no autocorrelation because the significance value of 0.675 is greater than 0.05. Based on the results of the heteroscedasticity test, it can be seen that the significance value for Carbon Emission Disclosure (CED) is 0.707 and Corporate Social Responsibility Disclosure (CSRD) is 0.620, greater than 0.05, there are no symptoms of heteroscedasticity.
Journal of Economics and Sustainable Development www.iiste.org ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) DOI: 10.7176/JESD Vol.10, No.12, 2019  From the above table 5, it can be seen that the coefficient of determination (Adjusted R Square) is 0.240. This shows that the carbon emission disclosure and corporate social responsibility disclosure variables can explain ROA of 24% while the remaining that is equal to 76% is explained by other variables not present in this study. The Standard Error of Estimate (SEE) value is 0.066, meaning that the smaller the SEE value will make the regression model in this study more precise in predicting the dependent variable, namely financial performance that is proxied by ROA.
The probability (F-statistic) significance value is below 0.05, which corresponds to 0.000. It can be concluded that the independent variables of carbon emission disclosure and corporate social responsibility disclosure have a simultaneous or joint impact on financial performance. Thus, the regression model in this study meets feasibility and can be used to predict financial performance.
Partial regression test results (t-test) indicate that Ha1 has been accepted so that it can be concluded that carbon disclosure has an impact on financial performance. Companies must recognize activities that are under their control to legitimize themselves. In this case, environmental activities can be used by disclosing carbon emissions as a form of voluntary information transparency of the company, which has the effect of improving the company's positive image, as stakeholders see what efforts are being made to protect the environment for the company's operations Protecting the company and this will impact on increasing the profits the company generates to sustain the company's sustainability. This is consistent with the study by Demirel and Eskin (2017) and Hermawan et al. (2018) that there is a positive impact between the disclosure of carbon emissions and financial performance.
Partial regression test results (t-test) indicate that Ha2 has been rejected, so it can be concluded that corporate social responsibility data has no impact on financial performance. Companies that take on social responsibility have competitive weaknesses because unnecessary costs affect shareholder value, so corporate profits decline and implementing CSR can only help to reduce the risk of their valuation being impaired in the long run and not increase company profits. This is consistent with the research of Yaparto (2013) and Eskin (2017).

Conclusion
From the research model was accepted, which means were the relationship of carbon emission disclosure and corporate social responsibility disclosure to financial performance. While t-test for individual hypotheses only carbon emission disclosure has a relationship with financial performance. The hypotheses were not accepted or rejected was corporate social responsibility disclosure. The evidence suggests every company has a different vision, mission, and value and some of them have not been oriented toward the triple bottom line and green accounting. The research limitation are subjectivity at the stage of assessing content analysis to determine the extent of carbon emission disclosure and corporate social responsibility disclosure and then the research only involves companies that make positive profit. The implication of this research can be considered for the company's management in the formulation and as a form of voluntary information transparency of the company, which has the effect of improving the company's positive image as the stakeholders strive to improve the environment for operations, this will have the effect of increasing the company's profits so that it maintains its sustainability.
The researchers strongly suggest that for future research, (1) Add control variables that can affect financial performance, such as company size, environmental performance, and industry type.
(2) Use of other company sectors, such as miscellaneous industry, mining and infrastructure, listed on the Indonesian Stock Exchange to obtain a more representative sample to answer research problems. As significant differences in the nature of the business of the company being investigated may affect the results of the research, empirical tests and sector analyzes may be performed.