The Evolution of Sustainability Reporting Practices in Indonesia

Abstract

The sustainability principle in the business has become an international trend recently and lead to the business sustainability situation, requiring a corporate performance to be measured, disclosed, and accounted for using three dimensions: economy, social, and environmental. This study investigates the extent to which Indonesian companies have prepared sustainability reporting since the beginning (2006) to the mandatory regulation issued by Financial Service Authorities (2017). The characteristic of environmental-sensitive and non-sensitive companies in preparing sustainability reporting were also examined. This study attempts to provide information on sustainability reporting practices by collecting quantitative data through content analysis of companies’ sustainability reports. The stand-alone sustainability reports of the companies during the period of 2006–2019 were used to extract the sustainability disclosures, revealing 887 sustainability reports evaluation. The study finds that the sustainability reporting trend in Indonesia increases from year to year. Indonesian companies (sensitive and non-sensitive industry) mainly disclosed most information on economic information, social, and followed by environmental aspects. The second most disclosed by sensitive industry is community engagement, while one disclosed by the non-sensitive industry is information related to the new employee and employee turnover. The Human Rights indicators have the lowest disclosure percentage among others.