The role of green investment in enhancing environmental disclosure in Indonesia

Purpose This study aims to investigate the relationship between green investment and environmental disclosure in Indonesia. Design/methodology/approach This study analyzes data from the 2018 to 2022 period, sourced from companies listed on the Indonesia Stock Exchange (IDX), and applies several statistical methods, such as Coarsened Exact Matching (CEM), to effectively address concerns related to causality and endogeneity while minimizing potential bias. Findings The authors find a significant positive association between total green investment and environmental disclosure in the main tests. When companies engaged in green investment are more proactive in disclosing environmental information, they enhance their transparency and legitimacy in the eyes of stakeholders. Furthermore, robustness tests confirm a positive and significant impact of green investment on environmental disclosure, consistent across various models. Originality/value This study is the first to examine the impact of green investment on environmental disclosure practices within the Indonesian context using hand-collected data. By focusing on Indonesia, this research offers a novel contribution to the existing literature on corporate environmental practices in emerging markets.