Revealing the Green Leaders: Climate Change Disclosure based on TCFD’s Recommendations

Climate change disclosure is gaining increasing global attention, driven by political momentum from the 2015 Paris Agreement and the efforts of environmental activists. Previous research suggests that the green experience, management skills, and gender of directors can influence corporate disclosure on climate change. This research evaluates how corporate climate change disclosure, aligned with Task Force on Climate-related Financial Disclosures (TCFD) guidelines, is impacted by three board characteristics: a critical mass of women, generalist abilities, and green experience. The research population comprises companies operating in four key sectors – energy, basic materials, primary consumer, and property and real estate – that are listed on the Indonesian Stock Exchange (IDX). The research period spans from 2019 to 2023. This five-year period encompasses significant regulatory developments, notably the enactment of OJK Regulation No. 51/POJK.03/2017 regarding Sustainable Finance, which serves as a critical foundation for promoting sustainability reporting in Indonesia, and the introduction of OJK's Sustainable Finance Roadmap Phase II (2021-2025), which promotes TCFD implementation. This research uses a quantitative analytical approach, testing theories through secondary data analysis and panel data regression analysis. The secondary data source is corporate sustainability reports. The content analysis is conducted by the framework and guidelines established by the TCFD. The study results show that the presence of a woman's critical mass, generalist abilities, and green experience among directors is insufficient to enhance climate change disclosure without the support of external factors. Factors such as a patriarchal culture, short-term economic interest dominance, weak regulatory enforcement, and insufficient stakeholder pressure are key barriers to enhancing climate change disclosure in Indonesia. These findings underscore that the effectiveness of the Critical Mass Theory and Upper Echelons Theory is highly dependent on the socio-cultural context and institutional environment. This study also has practical implications, encouraging companies to disclose climate-related information according to the TCFD guidelines.