This study aims to examine how institutional pressures (coercive, mimetic and normative) shape environmental disclosures in Indonesia’s energy sector, focusing on the balance between symbolic and substantive practices.
Guided by institutional theory, this study uses thematic analysis of interviews with 22 sustainability reporting managers from energy companies listed on the Indonesia Stock Exchange.
Coercive pressures, particularly through the Financial Services Authority Regulation (Peraturan Otoritas Jasa Keuangan) No. 51/2017, have institutionalised sustainability reporting but often lead to symbolic compliance, with minimal integration of sustainability into operations. Mimetic pressures drive the adoption of global frameworks like the Global Reporting Initiative, enhancing legitimacy but lacking local adaptation. Normative pressures encourage stakeholder engagement, but these efforts are often performative, prioritising investor demands over community concerns.
While the study focuses on the energy sector, its insights may be relevant to other industries facing similar institutional pressures. Future research could explore evolving institutional dynamics across sectors.
Policymakers should enhance enforcement and create incentives for substantive reporting. Companies must balance global standards with local realities and foster meaningful stakeholder engagement.
Improving the substance of environmental disclosures can enhance corporate accountability and sustainability in high-impact sectors.
This study contributes to institutional theory by exploring how coercive, mimetic and normative pressures shape disclosures in an emerging market and highlights the symbolic-substantive dichotomy in sustainability reporting.
