DETERMINANTS OF SUSTAINABILITY REPORTING IN THE INDONESIAN BANKING SECTOR: THE ROLES OF GOOD CORPORATE GOVERNANCE, INTELLECTUAL CAPITAL, AND RISK PROFILE
Keywords:
Sustainability Reporting, Good Corporate Governance, Intellectual Capital, Risk Profile, Banking SectorAbstract
This study examines the determinants of sustainability reporting in the Indonesian banking sector, focusing on the roles of the Good Corporate Governance Index (GCGI), Intellectual Capital (IC), and Risk Profile (RP). Using a purposive sampling technique, the sample consists of banks listed on the Indonesia Stock Exchange (IDX) that consistently published sustainability reports during the 2020–2024 period, resulting in 360 firm-year observations. Sustainability reporting was measured using the GRI Standards Index, GCG using board size and the proportion of independent commissioners, IC using the Value Added Intellectual Coefficient (VAIC), and RP using the NPL and LDR ratios. Panel data regression was employed with firm size (TA), profitability (ROA), leverage (DER), firm age (AGE), and NPL as control variables. The results show that, without control variables, GCGI and IC have a significant negative effect on sustainability reporting, while RP is not significant. After including control variables, IC remains consistently and significantly negative, RP becomes marginally positive, and GCGI loses its significance. Firm size and leverage emerge as the most dominant determinants. These findings are consistent across the economic, social, and environmental dimensions, with the environmental dimension being most sensitive to firm characteristics and risk level. The study contributes to the literature on sustainability disclosure by highlighting that firm characteristics play a more dominant role than internal governance mechanisms in shaping sustainability reporting practices in emerging banking markets.
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