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The Determinant Factors of Sustainability Report Quality and Corporate Performance: An Empirical Study

Author

Listed:
  • Nurul Hidayah
  • Lucky Nugroho
  • Hendy Prihanto

Abstract

Purpose: This study aims to obtain evidence and conclude that the quality of the sustainability report depends on stakeholder pressure, financial performance, and good governance so that the company's reputation and public trust will be better. The purpose of this research is to examine the determinant factors of sustainability report, including environmental, employee shareholder pressures and board of commissioners. Design/Methodology/Approach: Analysis of the data in this study using multiple regression models, supported by secondary data and purposive sampling with the criteria of companies that publish sustainability reports in Indonesia. Findings: This research indicates that environmental and shareholder pressures affect the quality of the sustainability report. Pressure from employees and the board of commissioners does not affect the sustainability report. Furthur, ROA is proven not to moderate the influence of environmental pressures, shareholders, employees, and commissioners on the sustainability report's quality. Practical Implication: The results of this research would enhance the quality of sustainability report in Indonesia by prioritizing the role of good governance and stakeholders interested. Originality/Value: The authenticity of this study is to provide empirical proof to the previous literature that environmental pressure, employee pressure, stakeholders pressure and, boards of commissioners are affiliated with the sustainability report quality.

Suggested Citation

  • Nurul Hidayah & Lucky Nugroho & Hendy Prihanto, 2021. "The Determinant Factors of Sustainability Report Quality and Corporate Performance: An Empirical Study," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 11(1), pages 24-37.
    • Handle: RePEc:ers:ijfirm:v:11:y:2021:i:1:p:24-37
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    References listed on IDEAS

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    1. Md. Abdul Kaium Masud & Mohammad Nurunnabi & Seong Mi Bae, 2018. "The effects of corporate governance on environmental sustainability reporting: empirical evidence from South Asian countries," Asian Journal of Sustainability and Social Responsibility, Springer, vol. 3(1), pages 1-26, December.
    2. Breeda Comyns, 2016. "Determinants of GHG Reporting: An Analysis of Global Oil and Gas Companies," Journal of Business Ethics, Springer, vol. 136(2), pages 349-369, June.
    3. Astrid Rudyanto & Sylvia Veronica Siregar, 2018. "The effect of stakeholder pressure and corporate governance on the sustainability report quality," International Journal of Ethics and Systems, Emerald Group Publishing Limited, vol. 34(2), pages 233-249, May.
    4. Geert Braam & Roy Peeters, 2018. "Corporate Sustainability Performance and Assurance on Sustainability Reports: Diffusion of Accounting Practices in the Realm of Sustainable Development," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(2), pages 164-181, March.
    5. Paul Shrivastava & Amr Addas, 2014. "The Impact of Corporate Governance on Sustainability Performance," Post-Print hal-01513941, HAL.
    6. Paul Shrivastava & Amr Addas, 2014. "The impact of corporate governance on sustainability performance," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 4(1), pages 21-37, January.
    7. Belen Fernandez-Feijoo & Silvia Romero & Silvia Ruiz, 2014. "Effect of Stakeholders’ Pressure on Transparency of Sustainability Reports within the GRI Framework," Journal of Business Ethics, Springer, vol. 122(1), pages 53-63, June.
    8. Clarkson, Peter M. & Li, Yue & Richardson, Gordon D. & Vasvari, Florin P., 2008. "Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis," Accounting, Organizations and Society, Elsevier, vol. 33(4-5), pages 303-327.
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    Cited by:

    1. Hind Shafeeq Nimr Al-Maliki, 2022. "A Comparative Analysis of Reputation in Enlisted Firms on the Iraq Stock Exchange," JRFM, MDPI, vol. 15(11), pages 1-11, November.
    2. Amal Fadhil Akho Bashah Al Kaab & Asaad Mohammed Ali Wahhab, 2023. "Evidence from Iraqi Banks on the Reporting of Sustainability Determinants and Their Impact on Market Returns," Technium Social Sciences Journal, Technium Science, vol. 44(1), pages 79-102, June.

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    More about this item

    Keywords

    Environmental pressure; employee pressure; stakeholders pressure; boards of commissioners; sustainability report quality.;
    All these keywords.

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M38 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Government Policy and Regulation

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