Sustainability Report Practices in Indonesia: Context, Policy, and Readability

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Abstract

Considering sustainability disclosure become one important issue, while still there no universal agreement for the guidance, this study aims to examine Indonesia's Sustainability Disclosure trend using GRI as quantity dimension, KLD for the quality, and readability and PROPER to measure how well they communicate. This study uses a sample of 224 firm-year observation from 2013-2017 based on GRI database. Descriptive analytic employed to figure disclosure trend in general, year to year, and industry base, and Pearson to explain correlation between measurements. There are three important issue discovered in this research. First, Indonesia's sustainability disclosure is generally low but mixed among different proxies by the year, and SIC 2 as the best quantity disclosure and SIC 4 provides readable report. Second, we found a significant positive correlation between quantity and quality sustainability disclosure. Third, the result reveals an indication that PROPER award rely on corporate's environmental risk disclosure. This study limited to public company that issue Sustainability Disclosure hence sample relatively small. This research provides insight for firms to improve quantity and quality of firm's Sustainability Disclosure as development of trends is not optimized.

Keywords: sustainability report, corporate social responsibility, Indonesia

JEL Classifications: Q51, Q56

DOI: https://doi.org/10.32479/ijeep.8979

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Author Biographies

Iman Harymawan, Universitas Airlangga

Iman Harymawan is a Assistant Professor in the Department of Accounting, Faculty of Economics and Business, Universitas Airlangga, Indonesia. He obtained his PhD degree (2016) in accounting from City University of Hong Kong in Hong Kong, MBA degree (2009) from National Cheng Kung University in Taiwan, and his B.A. degree (2006) in accounting from Universitas Airlangga in Indonesia. His current research focuses include: corporate governance issues, the accounting impact of political and military connections in business, and financial reporting quality. He currently teaches financial reporting analysis, managerial accounting, and advanced accounting. Research interest: board connection; corporate governance, management accounting

Fajar Kristanto Gautama Putra, Universitas Airlangga

Fajar Kristanto Gautama Putra is master student in accounting from Universitas Airlangga in Indonesia. He obtained his bachelor degree (2018) in accounting from Universitas Airlangga. He currently works as reseach assistant in Center of Politic, Economic, and Business Research (CPEBR), a researcher grup that operates under Faculty of Economics and Business, Universitas Airlangga, Indonesia. Research interest: human resources disclosure; sustainability reporting

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Published

2020-03-17

How to Cite

Harymawan, I., Putra, F. K. G., Agni, T. D. K., & Kamarudin, K. A. (2020). Sustainability Report Practices in Indonesia: Context, Policy, and Readability. International Journal of Energy Economics and Policy, 10(3), 438–443. Retrieved from https://www.econjournals.com/index.php/ijeep/article/view/8979

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