The Effect of Public Shareholding and Environmental Costs on Low Carbon Economy Disclosure: The Mediating Role of Green Initiatives

Dewi Kirowati; I Made Suparta

doi:10.58905/apollo.v5i1.760

Authors

Dewi Kirowati Madiun State Polytechnic, Madiun, East Java, Indonesia
I Made Suparta August 17, 1945 University of Surabaya (Untag Surabaya), Surabaya, East Java, Indonesia

DOI:

https://doi.org/10.58905/apollo.v5i1.760

Keywords:

Public Shareholding, Environmental Costs, Green Initiatives, Low Carbon Economy Disclosure, Sustainability Accounting

Abstract

This paper examines how public equity allocation and environmental expenditure influence corporate Low Carbon Economy Disclosure (LCED), emphasizing the intervening role of green initiatives. Drawing upon Stakeholder and Legitimacy theories, we analyze environmentally sensitive Indonesian listed firms—spanning manufacturing, mining, energy, plantation, and utility sectors—participating in the PROPER program from 2021 through 2024. Using Partial Least Squares Structural Equation Modeling (PLS-SEM) on a purposively selected panel dataset, we evaluate both direct structural paths and indirect mediation mechanisms. The statistical output demonstrates that direct public equity participation exhibits a significant negative association with LCED, whereas environmental costs display a non-significant direct effect. Crucially, mediation analysis reveals that green initiatives successfully bridge public shareholding to heightened low-carbon disclosure quality yet fail to mediate the path from environmental expenditure to LCED. Methodological robustness tests, including out-of-sample predictive evaluations () and discriminant validity checks (HTMT), confirm the empirical stability of the structural relationships. These results indicate that internal environmental programs serve as a pivotal operational bridge translating market ownership pressures into transparent corporate reporting. Consequently, corporate leaders must shift from passive regulatory compliance toward active, sustainability-driven programs to advance Net Zero Emission goals and elevate ESG reporting standards.

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