Sustainability Report Disclosures and Firm Value: Evidence from Indonesian Banks

Abstract

This study examines the dimension-specific associations between sustainability report (SR) disclosures and firm value within the Indonesian banking sector. Disaggregating GRI-based disclosure indicators into economic, environmental, and social dimensions, the analysis employs a fixed-effects panel specification on a balanced sample of three continuously reporting banks over the 2010–2023 period (42 bank-year observations). Firm value is proxied by Tobin’s Q. Baseline estimates reveal a statistically significant positive association between social disclosure and Tobin’s Q, a negative association for economic disclosure, and no statistically significant relationship for environmental disclosure. These empirical variations demonstrate that financial markets evaluate categories of non-financial disclosures heterogeneously. However, given the restricted sample size, the findings reflect conditional relationships specific to early SR adopters rather than generalizable industry-wide effects. The study highlights the necessity of disaggregating sustainability metrics in emerging market research and provides nuanced implications for standard-setters and financial institutions.