Corporate Greenwashing: The Discrepancy Between ESG Narratives, Environmental Performance, and Debt Costs of Indonesian Issuers
DOI:
https://doi.org/10.65310/4fnr6k54Kata Kunci:
Cost of debt, ESG disclosure, Greenwashing, PROPER, Sustainability assuranceAbstrak
This study investigates corporate greenwashing as a disclosure–performance gap between environmental narratives and externally observable environmental outcomes among environmentally sensitive non-financial firms listed on the Indonesia Stock Exchange during 2019–2024. The research integrates corporate textual analysis, PROPER-based environmental performance assessment, sustainability assurance, audit quality, and debt-financing considerations within a longitudinal framework. Environmental narratives are evaluated through disclosure intensity, positive tone, aspirational language, quantitative specificity, vagueness, readability, and target completeness, while environmental performance is benchmarked primarily using PROPER ratings. The results show that PROPER-rated entities increased from 2,012 to 4,290 during the observation period, whereas the proportion rated Blue or better declined from 84.84% to 69.02%. The combined Red and Black share increased from 15.16% to 30.98%, while the weighted environmental-performance score decreased from 2.960 to 2.779. These findings demonstrate substantial divergence between the expansion of environmental monitoring and substantive environmental performance. The study contributes by developing a Greenwashing GAP Index that distinguishes extensive environmental communication supported by strong performance from disproportionately favorable narratives and provides a framework for examining their implications for subsequent corporate borrowing costs.
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Hak Cipta (c) 2026 Sugianto Sugianto, Diganta Hatiboruah, Nurfitri Ramadana, Rizwan Raunaq Rao (Author)
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