Determinant Factors of Sustainability Reporting: A Study in Indonesian Green Index of Sri-Kehati

Abstract

This research aims to examine the determinant factors of sustainability report disclosure. Determinant factors include regulation of partnership and environmental development programs by state-owned firms, regulation of sustainability finance by listed firms on the Indonesian Stock Exchange, industry sensitivity, analyst coverage, and information asymmetry. Regulation of partnership and environmental development programs by state-owned firms is measured by state-owned status. Regulation of sustainability finance by listed firms on the Indonesian Stock is measured by period of before and after regulation issuance. Industry sensitivity is measured by level of environmental risk. Analyst coverage is measured by number of analysts who analyze the firms’ share in the stock market. Information asymmetry is measured by bid-ask spread. Sample consists of listed firms in Indonesian Green Index of Sri- Kehati 2015-2019. State-owned firms, sustainability finance regulation, industry sensitivity, analyst coverage, and information asymmetry have effect on sustainability report disclosure. State-owned status lead firms to disclose sustainability reporting as a picture of effective monitoring by government shareholders and to meet regulation needs. Sustainability finance regulation leads firms to disclose sustainability reporting as regulation needs. Higher industry sensitivity leads firms to disclose sustainability since sensitive industry brings higher risk to the environment. Higher analyst coverage and lower information asymmetry leads firms to implement higher transparency by disclosing sustainability report. Keywords: state-owned firms, sustainability finance regulation, industry sensitivity, analyst coverage, information asymmetry, sustainability report