The role of family businesses and active family members in environmental performance

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There is a growing concern about environmental issues, particularly carbon emissions, in many countries. Indonesia, with its huge population, also suffers from excessive carbon emissions. This study aims to investigate the effect of family businesses on environmental performance, specifically carbon emission disclosure. This study also explores the role of the family supervisory board and management on the quality of carbon emission disclosure. The study employed 62 non-financial family-listed firms in 2017–2019 (186 observations). The analysis found a positive and significant relationship between family enterprises and the disclosure of carbon emissions, implying that family firms expose more information about their carbon emissions. It also revealed a significant positive association between the family supervisory board and carbon emission performance, suggesting that having family members on the supervisory board aligns with policies for reducing and maintaining accountability for carbon emissions. In summary, the findings suggest that family enterprises prefer to exercise their indirect control by holding a position on the supervisory board and owning a substantial percentage of the company’s stock corresponding to their socio-emotional wealth agenda. Additionally, there is a non-linear association between family firms and the disclosure of carbon emissions. Carbon emission performance decreases as family share ownership rises to 53.1% but increases when family equity exceeds this cut-off point. Finally, family shareholders in non-polluted firms report higher quality of carbon emission disclosure.

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    • Table 1. Study sample
    • Table 2. Firm disclosure percentage for each item by year
    • Table 3. Percentage of items disclosed by theme and industry group
    • Table 4. Descriptive and correlation data
    • Table 5. Primary regression – Fixed effect
    • Table 6. Non-linearities test results
    • Table 7. Large samples and environmentally sensitive firms
    • Conceptualization
      Agus Joko Pramono, Rusmin Rusmin
    • Formal Analysis
      Agus Joko Pramono, Rusmin Rusmin, Emita Wahyu Astami
    • Funding acquisition
      Agus Joko Pramono, Bahrullah Akbar, Bahagia Tarigan
    • Methodology
      Agus Joko Pramono, Rusmin Rusmin, Emita Wahyu Astami
    • Validation
      Agus Joko Pramono, Bahrullah Akbar, Bahagia Tarigan, Rusmin Rusmin
    • Writing – original draft
      Agus Joko Pramono, Rusmin Rusmin, Emita Wahyu Astami
    • Writing – review & editing
      Agus Joko Pramono, Bahrullah Akbar, Bahagia Tarigan, Rusmin Rusmin, Emita Wahyu Astami
    • Resources
      Bahrullah Akbar, Bahagia Tarigan
    • Software
      Bahrullah Akbar
    • Supervision
      Bahrullah Akbar, Bahagia Tarigan
    • Data curation
      Bahagia Tarigan, Rusmin Rusmin
    • Project administration
      Emita Wahyu Astami