Environmental Disclosure: Symbolic or Substantive? Its Impact on Business Sustainability

Purpose: This study analyzes environmental disclosure from a substantive and symbolic perspective. Furthermore, this study analyzes the impact of each strategy on the Company's future business risks. Design/methodology/approach: This study was conducted in 348 observation units, which are manufacturing companies in Indonesia that existed during the post-COVID-19 period (2021-2023). The research data uses panel data, and the random effect model (REM) was selected as the best model for testing. Business risk is measured using the standard deviation of business risk (Std Dev BR) proxy. Substantive strategy of environmental disclosure quality is measured using GRI standard 2021 guidelines. Symbolic strategy of environmental disclosure quality is measured using the symbolic strategy (tone management). Findings: Descriptively, it is known that the quality of environmental performance reporting is still low, and wordplay in reporting is evident with management emphasizing more positive things and eliminating negative news. The regression analysis results show that substantive quality as a form of actual information disclosure positively affects business risk. In contrast, symbolic quality is a harmful threat to business sustainability in the future. Research limitations/implications: This study is limited to manufacturing companies, not specifically companies that are directly related to environmental pollution. Further research can develop a more extended observation period to compare environmental disclosure patterns during and after the pandemic. In addition, this study contributes to the government being more assertive in providing ideal reporting limits. Originality/value: This study is the first in Indonesia to assess the quality of environmental disclosure regarding compliance with regulations (GRI standards) and opportunistic management behavior in managing the tone of disclosure.