Corporate Social and Environmental Responsibility Disclosure in Indonesian Companies: Symbolic or Substantive?

Abstract

This study investigated the extent and quality of corporate social and environmental responsibility disclosure (CSERD) and whether firms increase CSERD in their annual reports as a form of moral responsibility (substantive actions) or to gain the attention of stakeholders (symbolic actions). A content analysis of the annual reports obtained from 1129 publicly listed companies on the Indonesia Stock Exchange measured the extent and quality of CSERD between 2011 and 2013. A descriptive analysis approach was used to address the research questions. We found that the quantity (quality) of CSERD in 2013 which consisted of both internal and external activities and actions related to helping others. The finding suggests that while the Indonesian government’s regulations oblige extractive industries to disclose their CSER activities, this study provides evidence that the financial industry leads the way in disclosing CSER activities in comparison to other industries. Further research is was 15695 (19820), which was higher than it was in 2011, 9928 (12355). Community involvement themes were the most frequently disclosed items. Interestingly, our findings showed that financial services companies communicated the most CSER information in comparison to companies in other industries. In terms of the quality of disclosure, this study found that firms disclosed more substantive information rather than symbolic actions. The substantive nature of CSERD was reflected in the majority of the disclosure themes,necessary to examine how government regulations affect the institutionalisation of CSERD.