Quality Of Sustainability Reports Research Articles

Mediating Role of Sustainability Reporting Quality on the Relationship Between Green Banking and Firm Value

Abstract The mounting environmental concerns have become a pressing issue across industries. Nevertheless, the banking sector has a distinct influence in shaping economic growth and development. This study sought to evaluate the impact of green banking in strengthening corporate value through its level of sustainability reporting in order to address these concerns. A research framework was developed based on theoretical support. The sampled data was collected from banks listed on the Indonesian Stock Exchange from 2018-2021. An empirical analysis was performed through hierarchical regression. The study’s findings indicated that green banking positively and significantly impacts firm value. Furthermore, there is a mediating effect between green banking and business value due to the quality of sustainability reporting. The empirical test revealed that the quality of sustainability reporting has a mediating effect to some extent. The results also showed that there is an interaction between business size (assets) and correlations between firm value and green banking. By undertaking a data-driven research that explains the impact of green banking on business value, this study aims to fill a significant gap in the body of knowledge on green banking and sustainability reporting.

The changing institutional logics behind sustainability reports from the largest hotel groups in the world in 2014, 2018 and 2021

We develop a content analysis framework that uses a pattern matching technique and a priori coding of stakeholder inclusiveness and engagement, and materiality of sustainability reports. Our analysis identifies the institutional logics behind the sustainability reports of the largest 50 international hotel groups in 2014, 2018, and 2021. We find that the quantity (under 60%) of sustainability reports barely increases over the eight years, but the quality improves. While multiple logics coexist, reporting evolves from a predominant market logic towards a more stakeholder logic, which results in greater transparency and more compliance with increasingly regulated reporting requirements. A longitudinal analysis shows that materiality orientation changes first, followed by stakeholder orientation, and, finally, transparency. We exemplify the values of institutional logics to analyze the multiple and conflicting rationales for the largely subjective and ambiguous practices that shape the quality of sustainability reports.

Materiality and stakeholder engagement in sustainability reporting: does it matter?

Materiality analysis and stakeholder engagement are crucial processes in sustainability reports which aim to identify material issues and prioritize them based on stakeholder interests. Subjectivity in the process of determining materiality and stakeholder engagement can affect the quality of sustainability reports because management can determine the information to be published and eliminate negative information related to sustainability. This research aims to investigate the influence of board of directors’ activity, presence of independence commissioners, company financial performance, and size on materiality disclosure and stakeholder engagement in mining companies in Indonesia. Content analysis and multiple regression analysis were carried out on 70 sustainability reports. The research results show that the involvement of the board of directors and the quantity of board members have a positive and significant effect, while the presence of independence commissioners and company size do not have a significant effect on materiality and stakeholder disclosure. It is noteworthy that disclosing materiality in sustainability reports is a crucial aspect of business practices, irrespective of the company’s financial status or size. This research contributes to the disclosure of materiality and stakeholder involvement in the reporting of companies operating in Indonesia from the perspective of stakeholder theory and legitimacy theory.

THE EFFECT OF EMPLOYEE ENGAGEMENT, CREDITOR ENGAGEMENT, GOVERNMENT ENGAGEMENT AND CUSTOMERS ENGAGEMENT ON QUALITY OF SUSTAINABILITY REPORTING IN INDONESIA

This study aims to examine the effect of employee engagement, creditor engagement, government engagement and customer engagement on the quality of sustainability reports in energy, raw goods and non cylical companies listed on the Indonesia Stock Exchange for the 2019-2022 period. The population in this study were energy, raw goods companies and non cylical listed on the Indonesia Stock Exchange for the 2019-2022 period. The sampling technique in this study used purposive sampling technique and obtained a sample of 39 companies. The data analysis method used is logistic regression analysis. The results of this study indicate that government engagement affects the quality of sustainability reports, while employee engagement, creditor engagement and customer engagement have no effect on the disclosure of sustainability reports.

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

Pengaruh Kualitas Laporan Keberlanjutan dan Risiko pada Profitabilitas Perusahaan

Sustainability is an issue that has received considerable attention recently. Publication of sustainability reports is also becoming a trend in Indonesia. This research was conducted to determine whether there is an influence by the quality of sustainability reports and risks on company profitability. The company's profitability is measured using the net profit margin. The quality of sustainability reports is measured using a model developed by Al-Shaer and Zaman (2016). Risk is measured using the company's stock beta. Companies listed on the IDX ESG Leaders index for the 2020-2022 period are used as sample. Result shows that the quality of sustainability reports has a positive effect on profitability but risk has no effect on profitability. The research results can be used as a guideline for investors who wish to invest in companies included in the IDX ESG Leaders index..

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.