Page 161 - IJES Special Issues for AIEC2016

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Investigative Studies on Environmental Disclosure and the

Costs of R&D as a Compliance with Government Policy on
Corporate Social Responsibility in Indonesia

Lindrianasari Amsir Saidi*, and Yuztitya Asmaranti
Economic and Business Faculty, Lampung University, Indonesia

International Journal of Abstract. The research objective is to provide empirical evidence on companies’
Environment and responsibility to achieve sustainable development, not only for Indonesia but for
Sustainability [IJES] the world. This study investigated the allocation of research and development
ISSN 1927-9566 costs as other government regulations issued related to the environment i.e., in
Vol. 5 No. 2, pp. 61-71 2004, 2007, and 2012. Samples observations as many as 246 companies in 11
(2016) years.

This study separately examined the enforcement of laws related to the environ-
ment three times (2004, 2007, and 2012). The test results show that the disclo-
sure of environmental information by food and beverage companies in Indonesia
increased significantly after the legislation was issued. This finding suggests that
since the Indonesian government ratified the Kyoto Protocol in 2004, Indonesian
companies are more transparent in terms of informing the public about the envi-
ronmental conservation activities that they do.

The study also found that there is a positive relationship between the allocation
of research and development costs associated with the reduction of the com-
pany’s carbon emissions during the year of observation. Significant relationships
were also found in 2007 when the government issued Law No. 40 of 2007. How-
ever, in 2012 we did not find a significant relationship. This study concluded that
the legal instruments that require companies to reduce carbon emissions is ur-
gently needed in developing countries like Indonesia. This policy will also deter-
mine the success of Indonesia in realizing the commitments to reduce carbon
emissions.

Keywords. environmental disclosure, sustainability development, Kyoto Protocol,
carbon emissions, greenhouse gases, cost of research and development

*Correspondence:
sari_170870@yahoo.com

1. Background was adopted from the Rio De Janeiro Earth Sum-
mit in 1992 (http://id.wikipedia.org/wiki/Pro
The restlessness of the entire world on issues of tokolKyoto).
extreme climate change has awakened countries
to the need to agree and cooperate on decreasing Consideration of the issuance of UU RI No. 17
the carbon emissions index. Carbon emissions Year 2004 is:
are generally produced from fuel combustion
coming from companies, vehicles, and house- “ .... that the Earth’s climate change as the result
holds. There has been extensive thought given to of increasing greenhouse gas concentration in
ways of overcoming this global problem. There the atmosphere generates adverse effects on
has been great momentum since the Kyoto Pro- [the] environment and human life, so it needs to
tocol was signed in Kyoto (Japan) on December be controlled in accordance with common but
11th, 1997 and effectively applied on February differentiated responsibilities by paying atten-
16th, 2005, after the official ratification from tion to social and economic conditions of each
Russia in November 2004. The Kyoto Protocol country; that as an archipelago country that has