Quality Of Sustainability Reports Research Articles

PENGARUH KONEKSI POLITIK, KEPEMILIKAN PEMERINTAH, PROFITABILITAS, DAN LEVERAGE TERHADAP KUALITAS LAPORAN KEBERLANJUTAN PADA BUMN INDONESIA

This study aims to examine the relationship between political connections, state ownership, profitability. leverage, and sustainability reporting quality (SRQ) of listed companies in Indonesia. The author measures political connections using a dummy variable, state ownership measured by number of government shares divided by number of outstanding shares, profitability measured using return on asset (ROA), leverage using debt to total asset ratio (DAR), and the sustainability report quality using scoring system, which ranges between 0 to 4. The highest score is achieved when sustainability reporting is independently guaranteed by the audit firm. The lowest score refers to the absence of sustainability reporting. This study emphasizes 20. State-Owned Enterprise listed on the Indonesian Stock Exchange from 2017- 2021 using multiple linear regression techniques, supported also by the control variable which wa.s firm size. The result of this study is state ownership has a negative effect on sustainability report quality. While other results which was political connections, profitability, and leverage have no effect on sustainability report quality.

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

Analysis of the Factors Influencing the Disclosure Quality of Sustainability Reports in Companies in Indonesia

Sustainability reports are useful for disclosing the company's performance on economic, environmental and social aspects, as well as the company's efforts to become a company that is accountable to all company stakeholders in general and also to society in a broad context. The report describes all business activities carried out for reporting responsibility to parties who need information as a form of transparency on activities carried out by the company. This study aims to find out the quality of disclosure of sustainability reports on companies in Indonesia and the effect of company size on the quality of disclosure of sustainability reports. This research uses companies listed on the Indonesia Stock Exchange in 2021. The samples to be taken are 38 companies that meet the predetermined criteria. To measure the level of quality of disclosure of sustainability reports, researchers use the disclosure index method, using a scale of 0 to 3 of the standard disclosures set by the Global Reporting Initiative (GRI). The results of the study show that the level of quality of sustainability report disclosure is at the lowest level of assessment with the Bronze predicate in the disclosure of sustainability reports

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.

Assessing sustainability reporting of Indian infrastructure firms

This paper summarizes the arguments and counterarguments within the scientific discussion on the issue of Business sustainability. The main purpose of the research is to look at the quality of sustainability reports of Indian infrastructure firms and use scoring method from literary sources for solving the problem and the issue of Business sustainability. The relevance of this scientific problem decision is that it adds to the literature of sustainability of firms. Investigation of the topic in this paper is carried out by using the Global Reporting Index (GRI) framework viz., economic, environment and social factors Methodological tools of the research methods were scoring methods which has been used for decade by the researchers in this field of study. The object of research is the analysis of sustainability reports of Indian Infrastructure firm because this sector faces namely external business environment negativities in Indian context. The paper presents the results of an empirical analysis by comparing large, medium and small firms, which showed that difference inside the large, medium, small group of companies. We find support to the earlier researches that have shown, large companies report better sustainability scores more than smaller ones on sustainability reporting. The research empirically confirms and theoretically proves the resources based view of strategic management. The results of the research can be useful for policy makers who can promulgate better incentive and provide technical expertise to medium and small firms to enhance their sustainability reporting.

Analysis of sustainability reporting quality and corporate social responsibility on companies listed on the Indonesia stock exchange

This study aims to analyse the diffusion level of non-financial reporting (sustainability reporting, corporate social responsibility, and integrated reporting) in companies listed on the Indonesia Stock Exchange and analyse the quality of sustainable reporting standalone. Indonesia, which is one of the emerging market countries, has not yet established independent sustainable reporting regulations, but a small number of companies in Indonesia are committed to following global regulations to support sustainable development. The study was conducted on public companies listed on the Indonesian stock exchange and examined 240 sustainability reports from 2016 to 2019. For the quality of sustainable reporting standalone, we used the disclosure of triple bottom-line items (economic, environment, social) in accordance with GRI and content analysis to analyze the quality of sustainability reporting based on the GRI (Global Reporting Initiative) principles to measure quality: clarity and accuracy, timeliness, and engagement, stakeholders, comparability, and reliability. This analysis follows, whos argue that in Indonesia public companies, there do not yet require the preparation of a standalone sustainability report. This study shows that the diffusion of sustainability reports is still shallow compared to mandatory social responsibility reports. The quality of sustainability reports based on disclosure is also still low, but industry groups vary in quality. The quality of Sustainability Reporting is based on timeliness and stakeholder engagement, and comparability, satisfactory. However, for clarity and accuracy, the results are acceptable, while reliability is less acceptable.

What affects the quality of sustainability report texts? Evidence from China

AbstractWe relied on web crawlers and text analysis techniques to develop a new method for measuring the quality of sustainability report texts, and accordingly discussed the impact of chief executive officers' (CEOs') characteristics on the quality of sustainability report texts. We found that companies led by younger CEOs and CEOs with better‐educated, financial and overseas backgrounds provided higher quality sustainability reports, while companies led by female CEOs and CEOs with academic backgrounds provided poorer quality sustainability reports. We also unpacked the “black box” of sustainability report quality, grouping it into three aspects: comprehensiveness, objectivity and reliability. Further research found that CEO characteristics had a greater impact on the quality of sustainability reports in the sample of voluntary and non‐state‐owned enterprises. Our study has the potential to contribute to the selection of CEOs and the improvement of sustainability disclosure.

Pengaruh Kualitas Sustainability Report terhadap Relevansi Nilai Informasi Akuntansi

We examine the effect of the quality of the Sustainability Report on the value relevance of accounting information. The population is all companies listed on the Indonesia Stock Exchange for the 2016-2019 period. Sampling was carried out by purposive sampling which resulted in 60 companies with 4 years of observation (2016-2019). The value relevance of accounting information is carried out by the price model, Ohlson (1995). The quality of the Sustainability Report is measured by a disclosure index based on GRI G4 and GRI Standards. The results show that in 2016-2019 observations, the quality of the Sustainability Report has a negative effect on the value relevance of accounting information. This phenomenon was caused by market anomalies in the value relevance of accounting information in 2019, due to the Covid-19 pandemic, which had an impact on the overall decline in Indonesian stock market prices at the beginning of 2020. In further testing, it was carried out by excluding 2019 observations, and the results were showing an increase in the quality of sustainability reports, increasing the value relevance of accounting information.

Sustainability Reporting Quality and Stakeholder Engagement Assessment: The Case of the Paper Sector at the Iberian Level

Materiality assessment identifies the main issues to be disclosed in non-financial reports to respond to the concerns of stakeholders, thus improving the quality of those reports. The purpose of this research is to understand whether there is a relationship between the quality of non-financial reports and the application of standards such as the Global Reporting Initiative (GRI) and the International Integrated Reporting Council (IIRC), as well as between the impact of stakeholder engagement and the adoption of the materiality principle. To do so, manual content analysis was performed on companies from the paper industry in the Iberian Peninsula that published non-financial reports in accordance with the GRI and/or IIRC standards during the period between 2015 and 2020. The sample consists of 133 company-year observations, and data were collected through content analysis of the reports. The results show that companies that more scrupulously follow the GRI and/or IIRC standards and those that pay more attention to the relationship with their stakeholders show higher levels of materiality, meaning higher quality of reports. In addition, it is also noticeable that, over the years, the concern with these disclosures has increased, reflecting an increase in attention given to materiality.

Corporate integrity, external assurance and sustainability reporting quality: evidence from the Malaysian public listed companies

PurposeThis paper aims to examine the effect of corporate integrity and external assurance on Sustainability Reporting Quality (SRQ) of Malaysian public listed companies.Design/methodology/approachThe study uses a longitudinal sample of 2,463 firm-year observations of non-financial firms listed on the main board of Bursa Malaysia from 2015 to 2019. The study employed panel regression that is, Fixed Effect (FE) Robust Standard Error estimation technique to test its hypotheses.FindingsThe panel regression results reveal that corporate integrity and external assurance positively and significantly influence the quality of sustainability reporting. Though the positive association shows an improvement in the SRQ of the sampled firms, it needs an improvement as the disclosure is more general and qualitative than quantitative. The present improvement in SRQ might result from some regulatory changes like the Sustainability Practice Note 9 Updates of Bursa Malaysia 2017 and the Revised MCCG Principle A to C within the same period.Research limitations/implicationsThe study adopts a purely quantitative approach and call for a qualitative investigation in the area in the future.Practical implicationsThe study has policy implication for the government and regulators to strengthen compliance with the sustainability reporting guide and the Practice Note 9 Updates. It also has implication for corporate integrity and external assurance for companies, to enhance SRQ and achieve sustainable development.Originality/valueThe study bridged literature gaps by offering new insights and empirical evidence on the role of corporate integrity in SRQ, which has received no empirical attention in the Malaysian context.

Gender diversity, sustainability reporting, CEO overconfidence, and efficient risk‐taking: Evidence from South Asian agri‐food industry

AbstractThis article aims to understand the impact of board gender diversity (BGD) on the firm's deviation from efficient risk‐taking (DERT) along with the mediating effect of sustainability reporting and the moderating effect of CEO overconfidence. The sample consists of 77 South Asian agri‐food firms over the period 2010–2019. To account for endogeneity and other statistical biases, we use a system GMM approach. The results show that there is a non‐monotonic relationship between BGD and DERT. Consistent with critical mass theory, we find that at least three women on board (WOB) are required to reduce the firm's DERT. The findings of the study also reveal that the overconfident CEO may restrict the female directors to achieve the firm's efficient risk‐taking. The evidence further suggests that sustainability reporting quality (SRQ) does not mediate the link between BGD and a firm's DERT. The robustness tests are performed based on alternative risk proxy and the likelihood of financial distress. Our results theoretically support stakeholder, critical mass, and agency perspective that South Asian capital markets should enhance the representation of WOB to mitigate agency conflicts and to improve long‐term firm sustainability.

The effect of chief sustainability officers on sustainability reporting—A management perspective

AbstractMore and more companies worldwide are appointing a chief sustainability officer (CSO) to anchor the topic of sustainability at the top management level. This study examines how a CSO on the management board influences the quantity and quality of sustainability reports. While quantity is measured by the amount of information disclosed (sustainability disclosure), quality is measured as the decision for external assurance of the sustainability report, using the Global Reporting Initiative (GRI) guidelines as a reporting framework and publishing a combined report. Using a sample of German listed companies for the years 2017–2020, regression analysis is first conducted to analyse the impact of CSOs on sustainability reports. Second, the study shows how a chief executive officer (CEO) and a chief financial officer (CFO) impact sustainability reports when they also serve as CSOs. The results suggest that CSOs improve sustainability disclosure. In addition, a CSO positively impacts the decision for external assurance of the sustainability report but shows no impact on using the GRI guidelines and publishing a combined report. The results also show that a CFO positively influences sustainability disclosure, while a CEO does not. This study contributes to the growing literature on sustainable governance and how having a CSO on the management board impacts sustainability reporting. The study has numerous implications for regulators and practitioners. The most important insight is which management position should be responsible for sustainability to improve reporting and the limitations of that decision.

KUALITAS SUSTAINABILITY REPORTING DALAM RISET PELAPORAN KORPORAT

The Sustainability Reporting (SR) quality had questioned because there is no standard in preparing SR enforced by standard setters in Indonesia. The SR quality had anticipated by reviewing corporate reporting research. Therefore, this study investigates the quality of SR in corporate reporting research. This study uses a systematic literature review from 2007-2020 through articles based on selected databases. The results showed that the measurement of the SR quality had dominated by the use of codification from the Global Reporting Initiatives (GRI). The accountability of corporate reporting, especially SR, cannot only be reviewed through GRI. The quality of SR in corporate reporting research shows that the codification proposed by other researchers besides GRI can be an alternative as a form of corporate reporting accountability. SR quality as an indicator of accountability for the implementation of the company's sustainability activities. The sustainability reporting quality is not a goal, only a tool to assess the sustainability of activities that an entity has carried out.

Planetary Boundaries: Disclosure Quality of Sustainability Reports

This study develops a new framework to analyze the disclosure quality of planetary boundary information in firms’ sustainability reports. Specifically, we construct a comprehensive disclosure index by mapping each planetary boundary to existing Global Reporting Initiative (GRI) standards, and by deriving a set of criteria to measure the quality of disclosure. Next, we employ a text mining technique to apply the disclosure index to analyze the sustainability reports lodged by the top 100 companies listed on the Australian stock exchange (ASX100) over the period from 2016 to 2020. We find an increase in reporting quality across the nine Planetary Boundaries over the five years of our analysis. A cross-sectoral analysis shows that firms in industries with a higher environmental impact, such as those in the Materials and Energy sector, tend to have a higher reporting quality. We validate our text-mining results against a manual analysis and examine the robustness of the results by showing positive associations of our disclosure scores with environmental performance measures from other data sources. This is the first academic study to examine planetary boundary disclosures of large, listed companies. Researchers and decision-makers may consider using the framework and method to identify potential planetary boundary risks for decision-making purposes.

Reputational risk disclosure in the firms of Pacific Alliance

PurposeEl propósito es determinar los rasgos predominantes de las corporaciones en cuatro países de América Latina asociados a la divulgación del riesgo reputacional en el marco de las explicaciones propuestas por la teoría del institucionalismo organizacional sobre el isomorfismo debido a presiones ambientales como la membresía de la OCDE y la pertenencia a la Alianza del Pacífico – AP.Design/methodology/approachUtilizando un modelo exploratorio de ecuaciones estructurales (SEM) con 26 variables de la Global Reporting Initiative GRI de una muestra de 205 grandes empresas de México, Perú, Chile y Colombia que pertenecen a la AP, durante 2016, la investigación evalúa la asociación de las características de las empresas con la divulgación del riesgo reputacional.FindingsEsta investigación encontró que el país, la industria, las condiciones de trabajo, el desempeño financiero y el estado en términos de empresas que cotizan en el mercado de valores y en los rankings de reputación corporativa utilizan para reverlar sobre el riesgo reputacional en sus informes. La industria financiera, regida por las directrices de Basilea, y las empresas con rendimientos más bajos tienden a revelar el riesgo reputacional. El isomorfismo no depende del tiempo de membresía en la OCDE.Practical implications:Los hallazgos revelaron que no basta con pertenecer a los mismos organismos multilaterales como AP u OCDE para crear isomorfismo en la mejora de la divulgación corporativa aumentando la calidad de los informes de sostenibilidad. Los responsables de la formulación de políticas y los gerentes necesitan más incentivos para evitar el silencio estratégico y la divulgación selectiva de información para promover una mayor transparencia para la sociedad y mejorar la utilidad de la información contable y corporativa para interpretar los riesgos comerciales, especialmente el riesgo reputacional.Originality/valueEste artículo contribuye a la literatura emergente en revelación de riesgos reputacionales con evidencia explicada en el marco de la institucionalidad organizacional evaluando las características que contribuyen al proceso de legitimación, con evidencia contraintuitiva sobre el isomorfismo presionado por organismos multilaterales y bloques económicos.

The model for measuring the Quality of Sustainability Reporting and Determinants: Application Analytic Network Process Fuzzy DEMATEL-Based Technique

Sustainability reporting is an important tool for decreasing information asymmetry, according to the stakeholders' demands for transparency. On the other hand, increasing transparency allows investors to have more appropriate evaluations of firms' activities and direct their investments to companies with more enthusiasm. In the organizational context, information asymmetry creates conflict between owners and managers. Managers tend to reduce the gap between themselves and stakeholders, particularly shareholders, by producing and delivering reports. Companies use sustainability reports to connect with their society and environment, as well as a way to manage interactions with various stakeholders for societal approval and activity continuation. The primary purpose of this study is to provide a model for measuring the quality of sustainability reporting and the determinants. In terms of methodology, the current study is qualitative, deductive, cross-sectional, applied, and exploratory. The criteria were identified and extracted, then evaluated and prioritized using Multi-Criteria Decision-Making approaches including Fuzzy Analytic Hierarchy Process and Fuzzy Decision-Making Trial and Evaluation Laboratory Analytic Network Process-based. The FAHP test revealed that of the six indicators, the GRI's reporting guidelines for sustainability Checklist were placed highest. Internal Controls Reporting, Sustainability Innovation Performance, and Earnings Quality rated first to third, respectively, among the 25 criteria affecting the quality of sustainability reporting, according to the FDANP.

ANALISIS PENILAIAN MATERIALITAS LAPORAN KEBERLANJUTAN PADA 15 PERUSAHAAN MULTIFINANCE

The background is materiality which is emphazised in the report guidelines in order to improve the quality of sustainability reports. Related to the company’s social, economic, and environmental issues. The lack of research discussing the materiality analysis of sustainability repoerts, prompted the authors to raise issue about the definition of materiality, stakeholder engagement, and identification of key materiality issues. This study aims to determine the practice of materiality assessment in sustainability reports in current financing services. Using stakeholder theory, legitimacy theory, and sustainability reporting standards. Taking 12 qualitative studies on materiality and non-materiality, and 7 quantitative studies on CSR. This research method is qualitative with a research design that examines the materiality aspect of sustainability reports reported by 15 companies in the financing services sub-sector. 4 companies provided an explanation of how materiality was defined, while the other companies only developed their own approach without GRI guidelines. And only 2 companies provided detailed information of stakeholder engagement. And 3 companies that convey the main materiality problems indicated. Therefore, there is still a lack of uniformity in sustainability reports related to materiality assessment, lack of completeness and transparency in Indonesia, especially for companies in the financing services sub-sector.