Government power to promote substantive biodiversity disclosure and compliance with environmental requirements

BACKGROUND AND OBJECTIVES: Biodiversity disclosure is an important component of sustainability reporting, especially in environmentally sensitive industries where corporate activities affect ecosystems, species, and natural habitats. In developing countries, disclosure practices often remain fragmented, inconsistent, and symbolic because institutional pressures and regulatory enforcement are uneven. This study examines whether government power enhances biodiversity disclosure and whether regulatory mechanisms can encourage firms to move from symbolic reporting toward more substantive, compliance-oriented biodiversity transparency.METHODS: Using panel data from ۱,۲۲۵ firm-year observations of environmentally sensitive firms in Indonesia during ۲۰۱۸–۲۰۲۳, this study employs instrumental variable two-stage least squares estimation to address potential endogeneity arising from reverse causality and omitted variables. Government power is proxied by the Program for Pollution Control, Evaluation, and Rating, a public environmental compliance rating program that combines monitoring, public evaluation, enforcement signals, and reputational incentives. Biodiversity disclosure is measured using a weighted index covering ۲۰ ecological disclosure items, while an unweighted binary score ranging from ۰ to ۲۰ is used as an alternative dependent variable for robustness testing.FINDINGS: The results show that government power has a positive and statistically significant relationship with biodiversity disclosure. The main instrumental variable model produces a coefficient of ۰.۱۴۱, whereas the ordinary least squares cluster models produce smaller coefficients ranging from ۰.۰۷۴ to ۰.۰۸۶. The alternative dependent variable specification also produces a positive and significant coefficient of ۰.۱۳۹. These findings indicate that the relationship remains consistent after addressing endogeneity, including year and industry fixed effects, adding firm-level controls, and applying an alternative disclosure measurement.CONCLUSION: The findings highlight the role of regulatory monitoring, public evaluation, and reputational mechanisms in promoting biodiversity disclosure. However, increased disclosure should not be equated with improved ecological outcomes. Disclosure mechanisms need to be integrated with science-based environmental metrics, independent verification, and site-level monitoring to strengthen the link between corporate transparency and biodiversity accountability.

کلیدواژه ها:

Biodiversity reporting ، Corporate environmental accountability ، Environmental reporting ، Government power ، Stakeholder theory.