The Influence of Climate Risk-Based Financial Reporting and Good Financial Governance on Investor Trust: A Comparative Study between Indonesia and Australia

Lusmino Basia (Jenderal Soedirman University, Mahakarya Asia University)
Bambang Agus Pramuka (Jenderal Soedirman University)
Diah Setyorini Gunawan (Jenderal Soedirman University)
Suharno Suharno (Jenderal Soedirman University)

The Indonesian Journal of Accounting Research
Vol 29, No 3 (2026): IJAR September 2026 in Progress

This study examines the influence of Climate Risk-Based Financial Reporting (CRFR) and Good Financial Governance (GFG) on Investor Trust (IT) through a comparative analysis of firms in Indonesia and Australia during 2020–2024. Using a quantitative approach with secondary data from the Indonesia Stock Exchange (IDX) and the Australian Securities Exchange (ASX), this research applies multiple linear regression to test baseline, country-specific, and comparative models. The results show that both CRFR and GFG significantly and positively affect investor trust, confirming that transparent climate disclosures and strong governance frameworks enhance market credibility and investor confidence. The effect is more pronounced in Australia due to higher regulatory maturity and investor awareness, while Indonesia’s developing framework results in moderate influence. These findings support Signaling, Stakeholder, and Legitimacy theories, emphasizing that transparent reporting and accountable governance are key to fostering investor trust and long-term financial sustainability across different institutional environments.