Title:
The Effect of Sustainability Reporting on Corporate Financial Performance: Empirical Study on Energy Sector Companies Listed on the Indonesia Stock Exchange 2020-2024

Authors:
Desy Fitriana, Khomsiyah, Indonesia

Abstract:

This study aims to analyze how sustainability reporting affects financial performance in energy companies listed on the Indonesia Stock Exchange from 2020 to 2024. Sustainability reporting is measured through three dimensions: economic (ECDI), environmental (ENDI), and social (SODI) disclosures, following the Global Reporting Initiative (GRI) standards. Financial performance is represented by Return on Assets (ROA), Sales Growth (SG), and Current Ratio (CR). The study uses panel data regression with the fixed effect model, based on a sample of 18 companies observed over five years, totaling 95 firm-year observations. The results show that economic disclosure significantly positively impacts ROA and CR but not SG. Environmental disclosure has a significant effect on SG, while its impact on ROA and CR is not significant. Social disclosure significantly affects SG but has no effect on ROA and CR. These findings support stakeholder theory and legitimacy theory, suggesting that sustainability disclosure improves financial performance when aligned with stakeholder expectations. However, the effects differ across disclosure dimensions, indicating that not all types of sustainability information influence financial outcomes equally. This study adds to the existing literature by providing empirical evidence from a high-impact sector in an emerging economy and offers insights for corporate strategy, investor decision-making, and regulatory policies related to sustainability practices.

DOI: https://doi.org/10.51505/IJEBMR.2025.9807