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Revealing the Green Leaders: Climate Change Disclosure based on TCFD's Recommendations

Author

Listed:
  • Widyana Rahma Cahyani

    (State University of Malang, Malang, Indonesia)

  • Sri Pujiningsih

    (State University of Malang, Malang, Indonesia)

  • Makaryanawati

    (State University of Malang, Malang, Indonesia)

Abstract

Climate change disclosure is gaining increasing global attention, driven by political momentum from the 2015 Paris Agreement and the efforts of environmental activists. Previous research suggests that the green experience, management skills, and gender of directors can influence corporate disclosure on climate change. This research evaluates how corporate climate change disclosure, aligned with Task Force on Climate-related Financial Disclosures (TCFD) guidelines, is impacted by three board characteristics: a critical mass of women, generalist abilities, and green experience. The research population comprises companies operating in four key sectors - energy, basic materials, primary consumer, and property and real estate - that are listed on the Indonesian Stock Exchange (IDX). The research period spans from 2019 to 2023. This five-year period encompasses significant regulatory developments, notably the enactment of OJK Regulation No. 51/POJK.03/2017 regarding Sustainable Finance, which serves as a critical foundation for promoting sustainability reporting in Indonesia, and the introduction of OJK's Sustainable Finance Roadmap Phase II (2021-2025), which promotes TCFD implementation. This research uses a quantitative analytical approach, testing theories through secondary data analysis and panel data regression analysis. The secondary data source is corporate sustainability reports. The content analysis is conducted by the framework and guidelines established by the TCFD. The study results show that the presence of a woman's critical mass, generalist abilities, and green experience among directors is insufficient to enhance climate change disclosure without the support of external factors. Factors such as a patriarchal culture, short-term economic interest dominance, weak regulatory enforcement, and insufficient stakeholder pressure are key barriers to enhancing climate change disclosure in Indonesia. These findings underscore that the effectiveness of the Critical Mass Theory and Upper Echelons Theory is highly dependent on the socio-cultural context and institutional environment. This study also has practical implications, encouraging companies to disclose climate-related information according to the TCFD guidelines.

Suggested Citation

  • Widyana Rahma Cahyani & Sri Pujiningsih & Makaryanawati, 2025. "Revealing the Green Leaders: Climate Change Disclosure based on TCFD's Recommendations," Oblik i finansi, Institute of Accounting and Finance, issue 2, pages 135-151, June.
    • Handle: RePEc:iaf:journl:y:2025:i:2:p:135-151
    DOI: 10.33146/2307-9878-2025-2(108)-135-151
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    References listed on IDEAS

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    1. Ishmael Tingbani & Lyton Chithambo & Venancio Tauringana & Nikolaos Papanikolaou, 2020. "Board gender diversity, environmental committee and greenhouse gas voluntary disclosures," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2194-2210, September.
    2. René P. Orij & Saif Rehman & Hashim Khan & Faisal Khan, 2021. "Is CSR the new competitive environment for CEOs? The association between CEO turnover, corporate social responsibility and board gender diversity: Asian evidence," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(2), pages 731-747, March.
    3. Shiran Li & Hongbing Deng & Kangkang Zhang, 2019. "The Impact of Economy on Carbon Emissions: An Empirical Study Based on the Synergistic Effect of Gender Factors," IJERPH, MDPI, vol. 16(19), pages 1-16, October.
    4. Ozlem Kutlu Furtuna & Hilal Sönmez, 2023. "Critical masses and voluntary climate change disclosures: evidence from Türkiye," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 20(5), pages 956-974, December.
    5. Halit Gonenc & Antonina V. Krasnikova, 2022. "Board Gender Diversity and Voluntary Carbon Emission Disclosure," Sustainability, MDPI, vol. 14(21), pages 1-18, November.
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    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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