CIRCULAR ECONOMY DISCLOSURE IN MINING COMPANIES : THE ROLE OF INSTITUTIONAL OWNERSHIP, AUDIT QUALITY, ENVIRONMENTAL MANAGEMENT SYSTEM (ISO 14001), AND ENVIRONMENTAL PERFORMANCE

Abstract

This study examines the effect of Institutional Ownership, Audit Quality, and Environmental Management System (ISO 14001) on the Transparency of Circular Economy Disclosure, with Environmental Performance as a moderating variable, in mining companies listed on the Indonesia Stock Exchange during 2021–2024. The study is motivated by growing environmental concerns arising from mining activities and the need for greater transparency in circular economy practices. This research is based on stakeholder theory, legitimacy theory, and signaling theory. A quantitative approach was employed using secondary data collected from annual reports, sustainability reports, company websites, and ISO 14001 certification data. The sample consists of 51 mining companies selected through purposive sampling from a population of 65 companies. Data were analyzed using multiple linear regression and Moderated Regression Analysis (MRA) with STATA 17. The results show that institutional ownership has a significant positive effect on the transparency of circular economy disclosure, indicating that higher institutional ownership encourages more transparent sustainability reporting. In contrast, audit quality and Environmental Management System (ISO 14001) have no significant effect on disclosure transparency. Furthermore, environmental performance does not significantly moderate the relationships between institutional ownership, audit quality, and ISO 14001 and the transparency of circular economy disclosure. These findings contribute to the sustainability accounting literature and provide insights for companies, investors, and regulators in improving sustainability disclosure transparency and environmental performance.