This study aims to explore the relationship between the Risk Management Committee (RMC) and Climate Risk Disclosure (CRD). Specifically, it investigates how the presence of a RMC influences the disclosure of climate-related risks among companies listed on the Indonesia Stock Exchange (IDX) during the period from 2017 to 2021.
The final sample for this research includes 432 observations from the IDX, excluding those classified under SIC code 6. The study employs multiple linear regression analysis, along with robustness checks and additional analyses using STATA 16.0, to examine the relationship between the RMC and CRD.
The results indicate that the RMC has a significant positive impact on climate risk disclosure, especially in firms that issue stand-alone sustainability reports, small firms and environmentally sensitive industries. The relationship became more pronounced after the implementation of Indonesia’s sustainable finance mandate (POJK No. 51 / 2017). Furthermore, this relationship is stronger in firms led by RMC chairs with an economic or political background. Notably, RMC presence is particularly associated with greater disclosure in the Risk Management and Metrics & Targets pillars of the Task Force on Climate-related Financial Disclosures framework.
This research contributes to existing literature by providing empirical evidence regarding the role of RMC in enhancing climate risk disclosure. It offers valuable insights for companies looking to improve governance practices and support adaptation and mitigation strategies through relevant policies.
