The Mediating Role of Green Innovation and Investor Sentiment in Climated Related Risk Toward Sustainability Reporting: Evidence from the Indonesian Context Inova Fitri Siregar1*, Tubagus Ismail2, Muhamad Taqi3, Nurhayati Soleha4
1Doctoral Scholar of Universitas Sultan Ageng Tirtayasa and Lecturer of Departement of Accounting, Faculty of Economics and Bussiness, Universitas Lancang Kuning, Email: inova[at]unilak.ac.id
2Departement of Accounting, Faculty of Economics and Bussiness Universitas Sultan Ageng Tirtayasa, Email: ismailtb[at]untirta.ac.id
3Departement of Accounting, Faculty of Economics and Bussiness Universitas Sultan Ageng Tirtayasa, Email: muhamad.taqi[at]untirta.ac.id
4Departement of Accounting, Faculty of Economics and Bussiness, Universitas Sultan Ageng Tirtayasa, Email: nurhayati.soleha[at]untirta.ac.id
Abstract
The purpose of this study is that companies must consider the impact that occurs on transition risk or physical risk and then need to know the opportunities in an effort to mitigate risk, so that the need for opportunities from climate-related risks is expected to have an impact on how investors react and the innovations that will be created. The sample criteria were financial sector companies and companies that completed sustainable reporting. This study collected 430 data from 740 companies that met the criteria. Data were collected from the 2021-2022 sustainability reports. The results of this analysis provide important insights into the role of green innovation and Investor Sentiment in the relationship between Climate Related Risk and sustainability reporting. This conclusion can help companies understand factors that contribute to the relationship between Climate Related Risk and sustainability reporting, as well as the potential impact of green innovation and investor sentiment. Implementing sustainability reporting is expected to encourage companies to more transparently communicate sustainable practices, environmental performance, social impacts, and corporate governance to stakeholders. This strategy will create a higher level of transparency in company operations and impacts. There are several important implications for companies and practitioners when designing business strategies that focus on sustainability.
Keywords: Climate Related Risk, Sustainability Reporting, Green Innovation, Investor Sentiment
