The Effects of Sustainability Governance, External Assurance, and Firm Characteristics on PSPK 1/2 Disclosure Gap: The Mediating Role of Climate Risk Management Disclosure and the Moderating Role of Climate-Sensitive Industry

Abstract

This paper examines the disclosure gap in Indonesian listed companies’ readiness for PSPK 1 and PSPK 2, sustainability disclosure standards aligned with IFRS S1 and IFRS S2. The topic is important because companies are expected to move from broad ESG narratives to measurable and financially relevant disclosures. This study applies a quantitative exploratory design using secondary data from annual reports, sustainability reports, ESG reports, financial statements, and assurance statements of selected Indonesian listed companies during 2023–2025. Documentary content analysis was used to construct PSPK 1/2 readiness, disclosure gap, sustainability governance, external assurance, and climate risk management disclosure indices. The analysis includes descriptive statistics, correlation analysis, VIF testing, and parsimonious regression. The findings show that PSPK 1/2 disclosure gaps remain evident despite the publication of sustainability reports. Climate risk management disclosure is the strongest factor associated with lower disclosure gaps, while sustainability governance supports readiness when translated into concrete climate-risk reporting practices. The study concludes that reducing PSPK 1/2 disclosure gaps requires stronger climate risk management systems, effective sustainability governance, and broader assurance scope. The implication is that listed companies should strengthen standard-based sustainability reporting before PSPK 1 and PSPK 2 become fully effective.