Quality Of Sustainability Reports Research Articles

Analysis of the quality of sustainability reports published by Brazilian companies: An analytic hierarchy process‐grey clustering approach

AbstractThis paper aims to assess the extent to which Brazilian companies adhere to the accuracy, balance, clarity, comparability, reliability, and timeliness criteria recommended by the Global Reporting Initiative (GRI) standards. A survey was conducted with experts in sustainability reporting with extensive experience in the Brazilian corporate context. The analytic hierarchy process was employed to assign weights to the criteria, and a grey fixed weight clustering model was proposed to analyze the collected data. Clarity and accuracy received the highest weights, which is concerning given the quality observed in sustainability reports. A lower emphasis on timeliness in sustainability reporting reflects many companies' publishing practices, prompting more efficient reporting. The majority of respondents perceive the quality of information in sustainability reports from Brazilian companies as falling within the medium maturity range, suggesting significant room for enhancement. The originality of this study lies both in the methodological approach, which combines multicriteria decision techniques capable of incorporating uncertainty related to data on sustainability reports, as well as in the results that provide information for improving sustainability reporting practices. The findings provide a foundation for companies and policymakers to enhance sustainability reporting, particularly in developing nations, promoting transparency, accountability, and international standard compliance.

Sustainability reporting quality in Malaysia: The intricacy of family controlled and politically connected firms

AbstractThe study contributes to the existing literature by examining the relationship between family‐controlled firms (FCFs), politically connected firms (PCFs), and sustainability reporting quality (SRQ) in Malaysia. The study utilizes panel regression techniques to test the hypotheses. The study's findings revealed that FCFs have a significant negative effect on SRQ. On the other hand, PCFs show a positive significant effect on SRQ. Moreover, the study uncovers a significant and positive interacting effect of PCFs in the relationship between FCFs and SRQ. The implication of this is that politically connected family‐controlled firms (PCFCFs) exhibit higher levels of sustainability performance and disclosure quality. The study offers valuable implications for regulators, scholars, and practitioners. Policymakers can use the insights from this paper to develop regulations and guidelines that encourage family‐controlled firms to improve the quality of their sustainability disclosures. Furthermore, the study provides a foundation for further research in this domain to confirm the result of the present investigation.

Laporan Keberlanjutan yang Berkualitas: Peran Stakeholder Pressure dan Corporate Governance

This is a quantitative research aimed at examining the influence of stakeholder pressure using the mechanisms of employees and shareholders, as well as corporate governance using the mechanisms of the board of commissioners and audit committees on the quality of sustainability reports. The study sample comprises 35 non-financial sector companies listed on the Indonesia Stock Exchange (BEI) during the period 2018-2021. Secondary data from annual reports and sustainability reports accessible through the Indonesia Stock Exchange website and related entity websites were used in this research. The study employs a random effect model with panel data regression, and data processing was conducted using STATA version 16. Based on the test results, it was found that one variable of corporate governance mechanism, which is the Audit Committee, has a significant positive impact on the quality of sustainability reports. However, the Board of Commissioners did not exhibit a significant influence. As for the stakeholder mechanisms of Employees and Shareholders, they did not demonstrate a significant impact on the quality of sustainability reports.

Sustainability Reporting Quality and Corporate Value: Indonesia and Malaysia Context

Sustainability Reporting Quality and Corporate Value: Indonesia and Malaysia Context

The Graphical Information in Sustainability Reports and Corporate Performance: A Southeast Asian Case Study

The primary objective of this study is to evaluate the graphical information quality within sustainability reports produced by companies in Southeast Asia that voluntarily disclose such reports. Additionally, the research delves into examining the correlation between graphical sustainability reporting and corporate performance, encompassing both financial and market-based indicators. The study focuses on companies in Southeast Asia that submit sustainability reports through the global reporting portal (www.globalreporting.org). A total of 132 sustainability reports from 33 companies in the Philippines, Malaysia, Singapore, Thailand, and Indonesia were analyzed consistently over the period from 2016 to 2019. The quality of sustainability reports was assessed using the Graphical Information Disclosure Index (GIDI). The findings reveal that, despite a negative impact on accounting-based performance measured by Return on Equity (ROE), the GIDI score exhibits a positive influence on market-based performance. This underscores the significance of graphical information disclosure in sustainability reports, emphasizing its potential impact on enhancing market perceptions and overall corporate performance in the Southeast Asian context. 

The Role of External Assurance in Moderating the Effect of Sustainability Reporting Quality on Firm Value

This quantitative research aims to examine the role of external assurance in moderating the effect of sustainability reporting quality on firm value in all companies listed on the Indonesia Stock Exchange in 2018-2022. This study uses purposive sampling to determine the research sample so that 27 companies that meet the criteria are obtained. Data analysis was carried out with the Moderated Regression Analysis (MRA) model using IBM SPSS. The results found that the sustainability reporting quality indicated by the disclosure of sustainability reporting has a positive effect on firm value because the more items disclosed, the higher the sustainability reporting quality which has an impact on increasing firm value. Then this study found that external assurance does not moderate the effect of sustainability reporting quality and firm value because there are still several influencing factors. The results of this study contribute empirically that companies still have to improve the sustainability reporting quality through more voluntary disclosures to increase firm value, even though the existence of external assurance in sustainability reporting has not been considered by investors.

Characteristics of Independent Commissioners and Company Performance on the Quality of Sustainability Reports: A Literature Review

This study examines the intricate dynamics of sustainability reporting by investigating the influence of independent commissioners, company size, and performance on the quality of sustainability reports. Employing a literature review spanning the last decade and drawing insights from SINTA and Scopus databases, the analysis utilizes financial ratios such as leverage, liquidity, and profitability as key indicators. The results indicate a positive correlation between the number of independent commissioners and the quality of sustainability report disclosures, emphasizing their crucial role in enhancing transparency and oversight. Companies demonstrating a sincere commitment to sustainability, supported by adequate resources and integrated sustainability metrics, exhibit superior report quality. Additionally, larger firms consistently outperform their smaller counterparts, producing more comprehensive and higher-quality sustainability reports. The implications underscore the significance of strategic balance, irrespective of company size, between financial and sustainability considerations for optimal reporting credibility and impact.

The influence of the beliefs of Italian and Spanish managers in their engagement in sustainability reporting

The EU legislature, through the approval of the Non-financial Information Directive, has made a decisive step towards a mandatory regime for Sustainability Reporting as an essential condition to promote sustainable behavior across European countries. This paper aims at examing the impact of managers’ beliefs and attitudes on NFI mandatory reporting practices through the Theory of Planned Behavior. We test whether managers’ attitudes, subjective norms, and perceived behavioral control impact the quality of sustainability reports in Spain and Italy. We built a reflective-formative hierarchical component PLS-SEM model, tested in a survey of 104 Italian (56.73%) and Spanish (43.27%) managers, that combines different latent variables and their relationships, which confirms all our hypotheses. This cross-country analysis is motivated by some differences between Italy and Spain in their cultural orientation and in the area non-financial reporting. To measure Non-financial Information, we crafted a Sustainability Reporting Quality Index for the same companies of the surveyed managers, that combines several reporting features of disclosure quality. We also consider whether other external factors, such as governance characteristics, social influence, and sustainable education, affect managers’ intention to engage in Sustainability Reporting. The results reveal that our model, along with sustainable education and social influence explain more than 56% of the intention to engage in Sustainability Reporting. This indicates that the latter latent variable is well predicted, confirming the relevance of managers’ beliefs in driving quality Sustainability Reporting practices. Our findings may specifically help business managers and decision-makers to identify the factors that are likely to influence sustainability reporting in Italy and Spain and contribute to develop efficient sustainable reporting strategies by decision-makers.

Governance mechanism to improve sustainability report quality: the impact on information risk and stock market participation

PurposeThis study aims to examine the effect of sustainability report quality (SRQ) on information risk. This research also aims to examine the effect of SRQ on stock market participation through information risk.Design/methodology/approachThe research sample includes 120 firm-years listed on the Sri Kehati Index period of 2017–2021. The hypothesis test uses firm and industry effect regression analysis. SRQ is measured by the existence of a sustainability committee and external assurance. The information risk is measured by bid-ask spread. Stock market participation is measured by volume of stock trading.FindingsBased on the data analysis, this investigation finds that SRQ reduces information risk. This research also finds that SRQ improves stock market participation by reducing information risk.Originality/valueFirst, this examination gives new evidence of SRQ to promote information environment improvement. Second, this examination contributes to providing the role of SRQ in an emerging market, such as Indonesia. Third, this examination contributes to providing the evaluation standard for sustainability reporting quality in Indonesia, since Indonesia has no specific standard for the sustainability report. Fourth, this examination contributes to filling the previous gap.

Pengaruh Tekanan Karyawan, Tekanan Pemegang Saham dan Gender Diversity terhadap Kualitas Sustainability Report

The purpose of this research is to examine the impact of employee pressure, shareholder pressure and gender diversity on the quality of sustainability report. To assess the quality of sustainability reports, this study employs the SRQ value, which is a disclosure index based on the GRI-Standard. The population of this research are companies listed on the Indonesia  Stock Exchange (IDX) over a five-year period from 2017 – 2021. By using the purposive sampling method, this research obtained 48 samples that met the criteria. This research uses multiple linear regression analysis in hypotheses testing. The findings indicate that employee pressure and shareholder pressure has a negative and significant effect on the quality of sustainability reports. On the other hand, gender diversity do not have any effect on the quality of sustainability reports.Thus, all the hypotheses proposed in this study were rejected.
  

Factors Affecting Quality of Sustainability Reporting: Evidence from Banking Industry in Sri Lanka

Sustainability reporting (SR) has been identified as a rapidly expanding area of modern corporate reporting. It is crucial in the current setting to explore the elements determining the quality of SR in Sri Lanka. Therefore, the study aims to identify the factors influencing the quality of SR in Sri Lanka. The sample of the study consists of ten commercial banks in Sri Lanka listed on the Colombo Stock Exchange. Secondary data was acquired from each commercial bank's annual reports over a six-year period from 2016 to 2021 in conducting the study. The quality of SR was evaluated using content analysis. This study applied the comprehensive approach developed by Permatasari, Gunawan, and El-Bannany(2020) to measure the quality of SR. Profitability, leverage, company size, and sustainability committee were the independent variables of the study. This analysis reveals that the most important elements influencing SR quality are company size, profitability, leverage, and the sustainability committee. Furthermore, the current study contributes significantly to expanding knowledge in the field of SR.

Pengaruh Good Corporate Governance, Tekanan Pemegang Saham, dan Umur Perusahaan terhadap Kualitas Sustainability Report

The quality of the sustainability report shows that the company is responsible and helps stakeholders understand and make decisions. Sustainability reporting is a tool or vehicle for companies to report and communicate environmental, economic and social aspects to their stakeholders. All reports issued by the company must be of high quality. This study aims to determine the simultaneous and partial effects of good corporate governance, shareholder pressure and company age on the quality of sustainability reporting. The subjects of this research are companies in the food and beverage manufacturing sector that are listed on the Indonesia Stock Exchange for the 2018-2021 period. The sampling technique used was purposive sampling. The research sample consisted of 80 observational data. Analysis of research data by panel data regression using the Eviews 12 application. The results of this study indicate that shareholder pressure has a significant positive effect on the quality of corporate sustainability reporting. Good corporate governance and company age have no effect on the quality of sustainability reports. Based on the results of this study, companies can improve the quality of their sustainability reports according to GRI standards and investors should consider sustainability reporting as one of their personal criteria. Future researchers will be able to use other independent variables or use different proxies for these variables and can also choose different research subjects.
  Keywords: good corporate governance, kualitas sustainability report, tekanan pemegang saham, umur perusahaan, 
  

The Effectiveness of Artificial Intelligence Systems in improving The Quality of Sustainability Reports in Light of GRI-G4

The Effectiveness of Artificial Intelligence Systems in improving The Quality of Sustainability Reports in Light of GRI-G4

Stakeholder Pressure and Its Effect on Sustainability Report

The quality of corporate sustainability reports in Indonesia is unfortunately found to be lacking, with a rating of only 53.6%. This is significantly lower compared to the average of other Southeast Asian countries. However, stakeholders are becoming more aware of their role in encouraging public companies to disclose sustainability information. This study intends to look at the quality of sustainability reports released by Indonesian public firms, as well as the impact of stakeholder pressure on these reports' quality. Data from annual and sustainability reports of businesses listed on the Indonesia Stock Exchange between 2016 and 2020 are used in the research, which is based on GRI's G4 guidelines and the GRI Standards 2016. The study looks at numerous stakeholder pressures, including pressure from creditors, media exposure, the Big Four accounting firms, employees, consumers, environmentally sensitive industries, and shareholders. The results show that companies with significant media coverage typically produce sustainability reports of high quality. However, pressure from other stakeholders has not been found to have a significant impact on the quality of these reports. This study provides valuable insights into the state of sustainability reporting in Indonesia and aims to encourage stakeholders to actively participate in promoting a sustainable industry.   

Pengaruh Tekanan Stakeholder Dan Board Governance Terhadap Kualitas Laporan Keberlanjutan

This study investigates the pressure of stakeholders and the governance board on the quality of sustainability reports which are used as the dependent variable. The data used is secondary data obtained from the financial reports of companies in the Basic Materials and Energy Sector which are listed on the Indonesia Stock Exchange (IDX) from 2017 to 2017. 2021. The sample for this study consisted of 14 companies selected using a technique known as purposive sampling. Using multiple linear regression analysis, the relationship between variables was investigated in this study. This research was processed using SPSS version 25. The results of this study, partially Environmental Pressure, Employee Pressure, Consumer Pressure, Investor Pressure, Number of Directors Members, Proportion of Independent Commissioners, and Female Members in Commissioners and Directors have a positive effect while the Age of Members of the Board of Commissioners and Directors has no effect on the Quality of Sustainability Reports in Basic Materials and Energy Sector companies listed on the Indonesia Stock Exchange (IDX) 2017-2021. Simultaneously, all variables have a positive and significant effect on profitability.

Sustainability reporting: Current state and challenges

AbstractThere exists a huge difference in sustainability reporting adoption & implementation within and between countries which affect achievement of desired results at global level for environmental protection and social development. This study summarises and analyses 133 studies of sustainability reporting published between year 2004 and 2022 in web of sciences (WoS) database through Bibliometric Analysis and also used Theory, Context, Characteristic Methodology framework to represent the state of research in this field for the first time. The study is divided in two sections (1) develop an understanding on sustainability reporting trends and thematic evolution, and (2) discussion on challenges of sustainability reporting adoption and implementation. The present study consolidates the state of research on sustainability reporting. The study finds a thematic shift since 2017 onwards and a significant increase in publications since 2018. It identifies four major thematic clusters namely, sustainability reporting, board gender diversity, content analysis, and ESG disclosure which reveals that ESG reporting, ESG disclosures, and sustainability stakeholder impact assessment has high potential for future research. It also contributes by identifying most prominent theories in the field viz stakeholder, legitimacy and institutional theory and preferred methodology as qualitative research. It finds emerging themes as Sustainability Reporting Quality, ESG disclosure, cross‐country evaluation and also highlights most relevant keywords and trends in the research field. Study recognises lack of common definition and conceptual understanding, standards measurement metrics and cross‐country evaluations as major challenges which stands as big problem at policy formation and implementation stage.

Profitabilitas, Tekanan Stakeholder, Komite Audit, dan Kualitas Sustainability Report

Sustainability reports are reports issued by companies regarding performance in economic, social and environmental terms for stakeholders. Factors that influence the quality of the Sustainability report are profitability, stakeholder pressure, and the audit committee. The purpose of this study was to determine the effect of profitability, stakeholder pressure, and the audit committee on the quality of sustainability reports by using stakeholder theory and legitimacy theory. This research was conducted on banking subsector companies listed on the Indonesia Stock Exchange (BEI) during 2017-2020. The sampling technique used a purposive sampling method with a total of 44 samples obtained. The analysis technique used is multiple linear regression. The results showed that profitability, stakeholder pressure, and the audit committee had a significant positive effect on the quality of the sustainability report.
 Keywords: Profitability; Stakeholder Pressure; Audit Committee; Sustainability report

Green Governance and Sustainability Report Quality: The Moderating Role of Sustainability Commitment in ASEAN Countries

This study aims to examine the role of green governance in the quality of sustainability reports. We also examine the moderating role of sustainability commitment between green governance and the quality of sustainability reports. This research is a quantitative study by using unbalanced data panels. The study retrieves the samples from the companies listed on the ASEAN Stock Exchange that published sustainability reports from 2015 to 2019. The research finding shows that the board’s independence, board diversity, and sustainability commitment are significantly associated with the quality sustainability reports. Moreover, the board size indicates a low effect on the reliability and the chief sustainability officer on the conciseness of sustainability reports. Meanwhile, it has not been possible to prove that the presence of sustainability committee can lead effect on the report quality. The sustainability commitment also moderates female directors and the quality of sustainability reports. Other findings are obtained from the company’s characteristics where company size and type of industry are positively correlated with the quality of sustainability reports. This study has several limitations. First, some companies that are under observation spend money on social costs, but the amounts are not clearly disclosed. Second, this research only focuses on three quality aspects: conciseness, clarity, and reliability. These research findings contribute to the following scopes. First, how green governance and commitment to sustainability help improve the quality of corporate reporting. Second, the investors should invest in companies that apply good green governance and sustainability commitment. Third, companies with strong commitments to sustainability and good corporate governance are competitive resources that support businesses in growing, attracting more investment, and earning stakeholders’ trust. Lastly, this research also contributes to the agency and the resource-based view theories related to the green governance and the sustainability reports’ quality of ASEAN countries.

The Relationship Between the Quality of Sustainability Reporting and Corporate Financial Performance: A Cross-Sectional and Longitudinal Study

The Relationship Between the Quality of Sustainability Reporting and Corporate Financial Performance: A Cross-Sectional and Longitudinal Study

Sustainability reporting quality of Indian firms? Pre and Post-SEBI amendment

Following the amendment of company listing agreements in 2012, which required the 100 top listed companies to submit their sustainability reports, this study suggests to compare the quality of these reports before (2011) and after (2021) using the sustainability reporting (SR) elements based on global reporting initiatives (GRI). For both years, we employed content analysis of 51 environmentally sensitive firms’ annual, integrated, and sustainability reports. The findings show a substantial upsurge in sustainability reporting quality (SRQ) from 2011 to 2021. The quality of SR improvement suggests that businesses are dedicated to reducing, if not eradicating, environmental deterioration and social well-being.