Available online at: http://journal.uinsgd.ac.id/index.

php/ks
Khazanah Sosial, Vol. 5 No. 4: 672-687

DOI: 10.15575/ks.v5i3.26099

Good Corporate Governance, Stakeholders, and Sustainability Report

Disclosure

Sheila Najla Syahirah1*, Harry Suharman2, Dede Abdul Hasyir3, Jumadil Saputra4
1-3Department of Accounting, Faculty of Economics and Business, Padjadjaran University, Indonesia
4Departement of Economics Faculty of Business, Universiti Malaysia Terengganu, Malaysia
*Corresponding Author E-mail: sheila20003@mail.unpad.ac.id

Abstract
Indonesia currently lacks a mandatory framework for sustainability reporting, with the existing reporting
requirements focusing on Corporate Social Responsibility (CSR) reports rather than comprehensive
sustainability reporting. This situation has resulted in a significant gap in the disclosure of sustainability
reports, as organizations often merely comply with CSR reporting obligations, neglecting broader
sustainability considerations. In 2020, challenges in sustainability reporting were evident, particularly in
the environmental, agrarian, and energy sectors. The Indonesian Forum for the Environment highlighted
issues such as the overexploitation of energy resources for corporate profits and potential biases from the
government in supporting energy and manufacturing markets, posing threats to sustainability reporting.
This study investigates the influence of Good Corporate Governance (GCG) and stakeholder pressure on
sustainability report disclosure. Utilizing a quantitative approach, the research focused on companies
listed on the Indonesia Stock Exchange (BEI) operating in the energy, raw materials, industry, and
infrastructure sectors, specifically those actively publishing sustainability reports. The data, extracted
from sustainability reports available on the BEI website, underwent statistical multiple regression
analysis. The findings reveal a significant positive impact of both good corporate governance and
stakeholder pressure on sustainability report disclosure, accounting for 77.5%. The implications suggest
that social pressure and GCG practices contribute to enhanced sustainability reporting, urging the
government to establish more stringent regulations. Future research recommendations include expanding
the sample size and incorporating additional variables.
Keywords: Good Corporate Governance; Stakeholder Pressure; Sustainability Report.

Abstrak
Indonesia saat ini belum memiliki kerangka kerja yang mengharuskan pelaporan keberlanjutan, dengan
persyaratan pelaporan yang ada lebih fokus pada laporan Corporate Social Responsibility (CSR) daripada
laporan keberlanjutan yang komprehensif. Situasi ini menyebabkan kesenjangan yang signifikan dalam
pengungkapan laporan keberlanjutan, karena organisasi sering hanya memenuhi kewajiban pelaporan
CSR, mengabaikan pertimbangan keberlanjutan yang lebih luas. Pada tahun 2020, tantangan dalam
pelaporan keberlanjutan menjadi jelas, terutama di sektor lingkungan, agraria, dan energi. Forum
Indonesia untuk Lingkungan menyoroti masalah seperti eksploitasi berlebihan sumber daya energi untuk
keuntungan perusahaan dan potensi bias dari pemerintah dalam mendukung pasar energi dan
manufaktur, yang dapat membahayakan pengungkapan laporan keberlanjutan. Penelitian ini bertujuan
untuk mengetahui pengaruh Good Corporate Governance (GCG) dan tekanan pemangku kepentingan
terhadap pengungkapan laporan keberlanjutan. Dengan pendekatan kuantitatif, penelitian ini berfokus
pada perusahaan yang terdaftar di Bursa Efek Indonesia (BEI) yang beroperasi di sektor energi, bahan
baku, industri, dan infrastruktur, khususnya yang secara aktif menerbitkan laporan keberlanjutan. Data,
diekstrak dari laporan keberlanjutan yang tersedia di situs web BEI, menjalani analisis regresi berganda
statistik. Temuan menunjukkan dampak positif yang signifikan dari baik Good Corporate Governance
maupun tekanan pemangku kepentingan terhadap pengungkapan laporan keberlanjutan, mencapai
77,5%. Implikasinya menunjukkan bahwa tekanan sosial dan praktik GCG berkontribusi pada
peningkatan pelaporan keberlanjutan, mendorong pemerintah untuk menetapkan regulasi yang lebih
ketat dalam hal ini. Rekomendasi penelitian masa depan mencakup perluasan ukuran sampel dan
penambahan variabel tambahan.

* Copyright (c) 2023 Sheila Najla Syahirah et al.

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License

Received: September 07, 2023; In Revised: December 23, 11; Accepted: December 29, 2023
 Khazanah Sosial, Vol. 5 No. 4: 672-687
Good Corporate Governance, Stakeholders, and Sustainability Report Disclosure
Sheila Najla Syahirah et al.

Kata Kunci: Tata Kelola Perusahaan yang Baik; Tekanan Pemangku Kepentingan; Laporan Keberlanjutan.

INTRODUCTION
The escalating global concerns related to the environment, social issues, and system management
are increasingly compelling companies to incorporate environmental, social, and governance (ESG)
considerations into their business models. This is crucial for competitiveness in the market and for
attracting investors. Sustainability itself has become a primary focus for all countries, with the goal of
ending poverty, protecting the planet, and ensuring prosperity by 2030 (Kementerian Perencanaan
Pembangunan Nasional/ Badan Perencanaan Pembangunan Nasional, 2017).
Madona & Khafid (2020) assert that a company is not merely an entity operating solely for its self-
interests but must deliver benefits to its stakeholders. Consequently, companies are responsible for
providing the community benefits within their operational environment. Olarewaju & Msomi (2021)
reveal that sustainable management, as reported in sustainability reports, piques stakeholders' interest in
understanding how a company approaches and performs sustainably across various aspects, thus holding
the potential to enhance the company's value. However, not all companies have yet achieved sustainability
report disclosure. The disclosure of sustainability reports is intricately connected with a company's
corporate sustainability performance. According to the Global Reporting Initiative (GRI) standards (Global
Reporting Initiative, 2016), sustainability disclosures typically necessitate governance disclosures to
manage the company, allowing for the evaluation of the implementation of a robust system of Good
Corporate Governance that influences the company's continuity performance. A significant consequence
of implementing Good Corporate Governance principles is that companies must not solely focus on
financial performance but also include an assessment of their social and environmental performance
(Alfaiz & Aryati, 2019). The concept of a sustainability report is employed to emphasize that leaders must
balance economic, social, and environmental considerations to achieve robust corporate sustainability
performance.
This research aims to investigate the influence of Good Corporate Governance (GCG) and
stakeholder pressure on sustainability report disclosure in the energy, raw materials, industry,
and infrastructure sectors, focusing on companies that have published sustainability reports. The
selection of the energy, raw materials, industry, and infrastructure sectors as samples is justified
by their status as high-profile companies, drawing public attention due to their substantial
operational activities. These industries, particularly mining companies, engage in activities that
explore natural resources on a large scale, often unintentionally causing environmental damage.
As a result, companies in the energy sector are compelled to undertake corporate social
responsibility to address stakeholders' concerns and ensure sustainable practices. The research
will delve into how GCG practices and external pressures from stakeholders impact sustainability
reporting within these sectors, shedding light on their commitment to environmental and social
responsibility.
A disparity exists between the findings of previous studies and the current investigation regarding
the impact of good corporate governance on a company's corporate sustainability performance, mainly
stemming from inconclusive results in earlier research. Previous studies have yielded inconsistent results,
indicating a lack of consensus in the literature. For instance, one study suggested no discernible influence
of stakeholder pressure on Corporate Social Responsibility (CSR) disclosure, further noting significant
variations in CSR implementation and disclosure between the banking and energy sectors. These

ISSN 2715-8071 (online) │ 673

 Khazanah Sosial, Vol. 5 No. 4: 672-687
Good Corporate Governance, Stakeholders, and Sustainability Report Disclosure
Sheila Najla Syahirah et al.

discrepancies extend to total disclosure as well as across each of the six Global Reporting Initiative (GRI)
indicators outlined in the Global Reporting Initiative 101 (GRI 101) (Global Reporting Initiative, 2016):
economic performance, market existence, indirect economic impacts, procurement practices, anti-
corruption, and anti-competitive behavior. In contrast, research by Suharyani (2019) demonstrated a
positive and significant impact of stakeholder pressure interests on the quality of sustainable reports,
highlighting the role of Good Corporate Governance as positively and significantly influencing the quality
of such reports. Conversely, a separate study conducted by Rudyanto (2018) contended that employees
negatively impact the quality of sustainability reports, while shareholders do not negatively influence such
reports. These conflicting findings underscore the need for a comprehensive examination to bridge the
identified gap and contribute to a more nuanced understanding of the relationship between good
corporate governance and corporate sustainability performance.
Qisthi & Fitri (2021) conducted a study titled "The Influence of Stakeholder Involvement on
Disclosure of Sustainability Reports Based on the Global Reporting Initiative (GRI) G4," revealing that
shareholder involvement significantly and positively affects sustainability report disclosure, while
employee involvement does not exhibit a similar positive effect. Similarly, Suharyani (2019) found in their
research that stakeholder pressure positively impacts sustainability reports. Alfaiz & Aryati (2019) also
contributed to the body of knowledge, concluding that employee pressure positively influences the quality
of a company's sustainability report. In contrast, shareholder pressure was identified as negatively
influencing the quality of sustainability reports. Additional experts, such as Eberl & Schwaiger (2005) and
Rupley et al. (2012), have demonstrated a positive relationship between stakeholder pressure, company
reputation, and its impact on Corporate Social Responsibility (CSR) report disclosure and business trust,
even though the analysis is applied in countries that are almost imperceptibly developing. Moreover,
Rupley (2012) emphasized in a study that there is a positive relationship between stakeholder pressure,
good corporate governance, and trust in the quality of CSR report disclosure in China's energy sector. Putri
et al. (2021) explained in their study that, individually, the board of commissioners, internal auditors, and
public share ownership have no influence on the extent of Corporate Social Responsibility (CSR)
disclosure, while the audit committee influences CSR disclosure. However, simultaneous tests indicated
that the board of commissioners, audit committee, internal auditors, and public share ownership have no
effect on the amount of CSR disclosure.
The preceding studies highlight persistent disparities in their findings, prompting the author to
delve deeper into the examination of stakeholder pressure. This research seeks to distinguish itself from
earlier studies through variations in the dependent variable, time frame, and the chosen sector for case
study analysis. The primary focus of this study centers on two key variables: Good Corporate Governance
and shareholder pressure. Additionally, the research incorporates three critical elements of a company's
continuity performance: economic, environmental, and social. By emphasizing these specific variables and
performance elements, the aim is to contribute novel insights to the existing body of literature and address
the inconsistency observed in prior research outcomes.
The understanding of good corporate governance, as articulated by the Forum for Corporate
Governance in Indonesia (FCGI) in 2021, lacks a specific definition but draws from the Cadbury Committee
of the United Kingdom. In translation, it refers to regulations controlling the connections between
shareholders, company administrators (managers), creditors, government entities, employees, and other
internal and external stakeholders. These regulations govern their rights, obligations, and the systemic
arrangements within the company. Conversely, Belanusa (2020) defines Good Corporate Governance as
an administrative mechanism that oversees the relationships between the company's management,

674 │ ISSN 2715-8071 (online)

 Khazanah Sosial, Vol. 5 No. 4: 672-687
Good Corporate Governance, Stakeholders, and Sustainability Report Disclosure
Sheila Najla Syahirah et al.

commissioners, directors, shareholders, and other stakeholder groups. This connection is embodied in
various conditions and public intensives, serving as the framework necessary to ensure the company's
goals, the means of achieving those goals, and the monitoring of resulting performance. In synthesis,
corporate governance is a systemic approach and a set of rules that regulate relationships among various
stakeholders, particularly in the narrower context of the relationships between shareholders, board
commissioners, and board directors in achieving the company's objectives. Ownership is perceived as the
power to control something exclusively owned for personal purposes. Shareholders who purchase shares
to gain returns or profits from their investments hold ownership (Lizarzaburu & Del Brio, 2016).

Good Corporate Governance (X1)

1. Roles and Responsibilities of the
Board of Directors and Board of
Commissioners
2. Composition and Remuneration of
the Board of Directors and Board of
Commissioners
3. Close, open, constructive,
professional, mutually trusting
working relationships
4. Commitment to act ethically and
responsibly, upholding
organizational values and culture.
5. Integrated corporate governance
practices with the implementation
of internal control and risk
management systems
6. Disclosure of financial condition
and performance, corporate Sustainability Report Disclosure (Y)
ownership and corporate
governance.
7. Fulfillment of shareholder rights
and fair treatment for
shareholders,
8. Stakeholder involvement

Shareholders as Stakeholders (X2.1)

Employees as Stakeholders (X2.2) Control Variable

1. ROA
2. DER
3. Firm Size
Government as Stakeholder (X2.3) 4. Company Age

Media as Stakeholders (X2.4)

Figure 1. Research Framework

The research framework of this study is depicted in Figure 1, the literature and previous studies
lead the researcher to propose hypotheses: (1) Good Corporate Governance positively and significantly
influences sustainability report disclosure, (2) Shareholders positively and significantly influence the
disclosure of sustainability reports, (3) Employees positively influence sustainability report disclosure, (4)

ISSN 2715-8071 (online) │ 675

 Khazanah Sosial, Vol. 5 No. 4: 672-687
Good Corporate Governance, Stakeholders, and Sustainability Report Disclosure
Sheila Najla Syahirah et al.

Government positively and significantly influences the disclosure of sustainability reports, and (5) Media
positively and significantly influences the disclosure of sustainability reports.

RESEARCH METHOD
The study design for this research is a descriptive exploratory approach with a quantitative
methodology. The research is conducted in Indonesia, spanning from March 2023 to November 2023.
Participants are companies listed on the Indonesia Stock Exchange (IDX) in the energy, raw materials,
industrial, and infrastructure sectors that published sustainability reports between 2020 and 2022. Data
collection involves secondary data analysis from the IDX website and online news sources. The indicator
for scoring the secondary data is based on the Forum for Corporate Governance in Indonesia (FCGI) with
weightings on eight fields for corporate governance proxies and self-assessment measurements.
Stakeholder pressure dimensions include shareholder, employee, government, and media pressures.
Sustainability report disclosure indicators are based on GRI G4 (Global Reporting Initiative, 2016) and
control variables include profitability with ROA ratio, leverage with DER ratio, firm size, and the age of the
company.
The research population comprises all companies listed on the Indonesia Stock Exchange (IDX) in
the energy, raw materials, industrial, and infrastructure sectors that have consistently published
sustainability reports between 2020 and 2022. The research sampling involves purposive sampling with
specific criteria: companies listed on the IDX in the specified sectors during 2020-2022 and publishing
sustainability reports during this timeframe.
Data collection is obtained from secondary data reported in the company's annual income
publications on the IDX website, and media exposure data is acquired from online news sources. Data
analysis involves multiple regression using the SPSS statistical software. Initially, secondary data is
collected from the IDX website and online media, then scored and coded in Excel through self-assessment.
After coding and scoring, the data is analyzed using SPSS for validation, regression, and hypothesis testing.

Table 1. Operational Variable

Variable Proxy Indicator Scale

Good Corporate GCG score through self-assessment
Governanceas according to measurements (Basri et
Ratio
variable independent al., 2021; Renaldo et al., 2022)
(X1)
a. Shareholder as (𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑃𝑎𝑟𝑒𝑛𝑡 𝐶𝑜𝑚𝑝𝑎𝑛𝑦 𝑆ℎ𝑎𝑟𝑒/
Ratio
stakeholder pressure (𝑇𝑜𝑡𝑎𝑙 𝑆ℎ𝑎𝑟𝑒𝑠)
b. Employee as
Natural logs of the total employee Ratio
stakeholder pressure.
If the company has position of share
Stakeholder Pressure
c. Government as ownership the government is given
as variable Nominal
stakeholder pressure 1 point, whereas If No will given 0
independent (X2)
(Allen et al., 2005)
Number of news about the companythe
on machine searcher Google in the
d. Media as stakeholder
reporting year (García-Sánchez et al., Nominal
pressure
2019)

676 │ ISSN 2715-8071 (online)

 Khazanah Sosial, Vol. 5 No. 4: 672-687
Good Corporate Governance, Stakeholders, and Sustainability Report Disclosure
Sheila Najla Syahirah et al.

Comparison between net

profit which is obtained
company with total his
Profitability(ROA)
assets For know how (𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥)/
as variable control
much reliable company in (𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠) Ratio
(X3)
manage its assets to
produce profit (profit)
(Shatnawi et al., 2021)
Tiers that protection is
Leverage(DER) as given by company to his (Total Debt)/(Total Assets)
variablecontrol (X4) creditors (Martin et al., Ratio
2017)
Company size is a what
Firm size as variable size? can classified big or
Ratio
control (X5) small a company (Martin Size= logs (Book Value of Assets)
et al., 2017)
Company age determined
Age companyas The year the company was founded up
with since its founding Nominal
variable control (X6) to the year of researchdone
somethingcompany
Disclosure indicator
ΣXij
sustainability in annual CSDIj =
nj
report and sustainability
consists of indicators of
Sustainability Report CSDIj: Disclosure index corporate
economic performance, Ratio
Disclosure (Y) sustainability for company j nj: total
environment, and social
items on company j, nj 91 Xij: Total
based on
items for disclosure (Tjahjadi et al.,
GRI indicators- G4.
2021)
(Strozzilaan, 2021)

The computation of the desirability index involves a two-step process. Firstly, the research
evaluates the occurrence of indicators, assigning a score of 1 if a company discloses information about a
particular indicator and a score of 0 if there is no disclosure. Subsequently, the study examines the quality
of the disclosed data. In this aspect, the breadth of information provided by the company is considered. A
company that merely mentions events without specific details receives a score of 1. If the company
discloses information about quality indicators, it is assigned a score of 2. Quantitative penetration in the
disclosure results in a score of 3, while a comprehensive disclosure covering both quantitative and
qualitative aspects for specific indicators merits a score of 4. The determination scores are summarized in
Table 2, providing a systematic approach to gauge the continuity of sustainability disclosure. This scoring
method, adapted from Hasan (2009), offers a nuanced evaluation that encompasses both the occurrence
and quality of disclosed data.

Table 2. Determination score for disclosure continuity

Sustainability Disclosure Score

Not-Qualitative & Not-Quantitative 1
Qualitative & Not-Qualitative 2
Not-Quatitative & Quantitative 3
Qualitative & Quantitative 4
Source: Hasan (2009)

ISSN 2715-8071 (online) │ 677

 Khazanah Sosial, Vol. 5 No. 4: 672-687
Good Corporate Governance, Stakeholders, and Sustainability Report Disclosure
Sheila Najla Syahirah et al.

RESULTS & DISCUSSION

In examining the impact of Good Corporate Governance (GCG) and stakeholder pressure on
sustainability report disclosure, this research employs multiple regression analysis, multicollinearity tests,
the R2 coefficient determinant, F-test, and t-test to address the hypotheses. The aim is to discern the
influence of GCG and stakeholder pressure (shareholders, employees, government, and media) on
sustainability report disclosure. The data analysis reveals that both GCG and stakeholder pressure exerts
a positive and significant influence on sustainability report disclosure, both collectively and individually.
Notably, the dimension with the highest impact is employee pressure as a stakeholder, while the lowest
impact is attributed to Good Corporate Governance. These findings align with prior studies (Alfaiz & Aryati,
2019; Cormier et al., 2004; Lu & Abeysekera, 2014; Qisthi & Fitri, 2021; Rudyanto & Veronica Siregar,
2018) and contrast with the results presented by Jannah & Muid (2014). The divergence between this
research and previous studies lies in the dependent variable, the study period, and the selected case study
sector. Detailed results for each multiple linear regression, F-test, t-test, and multicollinearity are
presented below.

Analysis Multiple Linear Regression

Multiple Linear Regression analysis is employed to test the dependent variable when two or more
independent variables are involved. Table 3 presents the results of the Multiple Linear Regression test
during the 2020-2022 period.

Table 3. Results in Multiple Linear Regression Test

Coefficients a
Model Unstandardized Standardized t Sig.
Coefficients Coefficients
B Std. Error Beta
1 (Constant) 8,555 2,331 5,818 ,002
GCG ,661 .123 ,821 3,251 ,000
SHAREHOLDERS ,770 ,196 ,957 5,867 ,001
EMPLOYEE ,551 ,221 ,712 6,201 ,002
GOVERNMENT ,622 .1 67 ,723 6.114 ,001
MEDIA ,455 .211 ,530 5,678 ,000
ROA -.533 ,159 -.723 -4,771 ,002
DER ,221 ,068 ,443 4,577 ,002
FIRM_SIZE -.877 ,020 -.929 -4,211 ,000
COMPANY_AGE -.940 ,083 -.1,040 -5,231 ,000
a. Dependent Variable: SR

The Multiple Linear Regression analysis in this study is processed using SPSS version 24 for data
processing. The results of the Multiple Linear Regression test yield the regression equation as follows:
SRDi = β0 + β1GCG + β2.1 SHAREHOLDERS + β2.2 EMPLOYEES + β2.3 GOVERNMENT + β2.4 MEDIA
+ β3ROA + β4DER + β5FIRM SIZE + β6AGE COMPANY + e

678 │ ISSN 2715-8071 (online)

 Khazanah Sosial, Vol. 5 No. 4: 672-687
Good Corporate Governance, Stakeholders, and Sustainability Report Disclosure
Sheila Najla Syahirah et al.

Test Multicollinearity
Variables that cause a relationship can be seen from mark tolerance which is not enough from 0.10
or mark VIF which is morebig than 10. Following is results test multicollinearity on research.

Table 4. Test Multicollinearity

Coefficients a
Collinearity Statistics
Model Tolerance VIF
1 GCG .284 2.335
Shareholder .754 5.177
Employee .361 5.530
Goverment .405 2.218
Media .366 3.177
ROA .204 4.560
DER .518 2.048
Firm Size .412 2.655
Company Age .436 1.998
a Dependent Variable : SR

Table 4 shows that based on results processing data, the mark tolerance from good corporate
governance is 0.284 bigger than 0.10, while the VIF value of the good corporate governance variable is
2.335,smaller than 10. The tolerance value of the shareholder variable is 0.754, which is greater than 0.10,
while the VIF value of the shareholder variable is 5.177, smaller than 10. The tolerance value of the
employee variable is 0.361 bigger than 0.10, temporary mark VIF variable employees 5, 530 aresmaller
than 10. The tolerance value for the government variable is 0.405, greater than 0.10, while the VIF value
of the government variable is 2,218, smaller than 10. For mark tolerance of variables media is 0.833 bigger
from 0.10, temporary mark VIF variable media is 4,560 smaller than 10. The tolerance value of the ROA
variable is 0.204, greater than 0.10, while the VIF value of the ROA variable is 2.478, smaller than 10. The
tolerance value of the DER variable is 0.518, which is greater than 0.10.
Meanwhile, The VIF value of the DER variable is 2.048, smaller than 10, for the value value. The
tolerance of the Firm Size variable is 0.412, which is greater than 0.10. Meanwhile, the VIF value of the
Firm Size variable is 2.655, which is smaller than 10. The tolerance of the Company Age variable is 0.538,
greater than 0.10, while the VIF value of the Company Age variable is 1.860, smaller than 10. Therefore,
whether looking at the tolerance value or VIF value, no multicollinearity happens in the research model.

T-test Influence in a way Partial)

The t-test results, which demonstrate the partial influence of independent variables on the
dependent variable in this study, are presented in Table 5.

ISSN 2715-8071 (online) │ 679

 Khazanah Sosial, Vol. 5 No. 4: 672-687
Good Corporate Governance, Stakeholders, and Sustainability Report Disclosure
Sheila Najla Syahirah et al.

Table 5. t-test

Coefficients a
Model Unstandardized Standardized t Sig.
Coefficients Coefficients
B Std. Error Beta
1 (Constant) 8,555 2,331 5,818 ,002
GCG ,661 .123 ,821 3,251 ,000
SHAREHOLDERS ,770 ,196 ,957 5,867 ,001
EMPLOYEE ,551 ,221 ,712 6,201 ,002
GOVERNMENT ,622 .1 67 ,723 6.114 ,001
MEDIA ,455 .211 ,530 5,678 ,000
ROA -.533 ,159 -.723 -4,771 ,002
DER ,221 ,068 ,443 4,577 ,002
FIRM_SIZE -.877 ,020 -.929 -4,211 ,000
COMPANY_AGEN -.940 ,083 -.1,040 -5,231 ,000
a. Dependent Variable: SR

Good Corporate Governance Influence on Disclosure of Sustainability Report

The partial test reveals that the Good Corporate Governance variable has a significance value of
0.000 < 0.05, with a t-count of 3.251 (greater than t-table). This implies that during the period 2020-2022,
the Good Corporate Governance (X1) significantly and positively influences the disclosure of Sustainability
Reports (Y). Therefore, Hypothesis 1 (H1) is accepted. The interpretation suggests that a stronger
implementation of Good Corporate Governance leads to higher-quality Sustainability Reports.

Shareholders' Pressure Influence on Sustainability Report Disclosure

The partial test indicates that the Shareholders variable has a significance value of 0.001 < 0.05, and
the t-count is 5.867 (greater than t-table). This signifies that during the period 2020-2022, the
Shareholders variable (X2.1) significantly and positively influences the disclosure of Sustainability Reports
(Y). Thus, Hypothesis 2 (H2) is accepted.

Employee as Stakeholder Pressure Influence on Disclosure of Sustainability Report

The partial test results show that the Employee variable has a significance value of 0.002 < 0.05, and
the t-count is 6.201 (greater than the t-table). This indicates that during the period 2020-2022, the
Employee variable (X2.2) significantly and positively influences the disclosure of Sustainability Reports
(Y). Hence, Hypothesis 3 (H3) is accepted.

The Influence of Government as Stakeholder Pressure on Disclosure of Sustainability

Report
The partial test results reveal that the Government variable has a significance value of 0.001 < 0.05,
with a t-count of 6.114 (greater than the t-table). This implies that during the period 2020-2022, the

680 │ ISSN 2715-8071 (online)

 Khazanah Sosial, Vol. 5 No. 4: 672-687
Good Corporate Governance, Stakeholders, and Sustainability Report Disclosure
Sheila Najla Syahirah et al.

Government variable (X2.3) has a significant positive effect on the disclosure of Sustainability Reports (Y).
Therefore, Hypothesis 4 (H4) is accepted.

The Influence of Media as Stakeholder Pressure on Disclosure of Sustainability Report

The partial test results indicate that the Media variable has a significance value of 0.000 < 0.05, and
the t-count is 5.678 (greater than the t-table). This suggests that during the period 2020-2022, the Media
variable (X2.4) significantly and positively influences the disclosure of Sustainability Reports (Y). Thus,
Hypothesis 5 (H5) is accepted.

F -Test (Influence in a way Simultaneous)

The F-test was employed to assess the simultaneous influence of independent variables at a
significance level (α) of 5% or 0.05. The results of the F-test for the period 2020-2022 are presented in
Table 6.

Table 6. Results F test

ANOVA a
Model Sum of df Mean Square F Sig.
Squares
1 Regression 3143.378 9 3143.288 11,42 .002 b
2
Residual 12135.70 83 ,066
0
Total 14494.30 92
0
a. Dependent Variable: SR
b. Predictors: (Constant), AGE_COMPANY, SHAREHOLDERS, GCG, DER,
MEDIA,ROA, EMPLOYEE, GOVERNMENT, FIRM_SIZE

Based on the results of the F-test conducted in Table 6, it is evident that the simultaneous influence
of the variables, namely Good Corporate Governance (X1), shareholder (X2.1), employee (X2.2),
government (X2.3), and media (X2.5), is significantly influential on Sustainability Reports (Y).

Test Coefficient Determination (R2 )

The test coefficient is determined to determine the percentage contribution of the influence of all
independent variables to the dependent variable. The mark used in coefficient determination is adjusted
To R-squared. Table 7 shows the results of the coefficient of determination test during the period 2020-
2022.
Based on Table 7, it is observed that the coefficient of determination obtained is 0.775 or 77.5%.
This indicates that the influence of Good Corporate Governance, shareholders, employees, government,
and media on Sustainability Report disclosure amounts to 77.5%, while the remaining 22.5% is attributed
to other unexplored variables.

ISSN 2715-8071 (online) │ 681

 Khazanah Sosial, Vol. 5 No. 4: 672-687
Good Corporate Governance, Stakeholders, and Sustainability Report Disclosure
Sheila Najla Syahirah et al.

Table 7. Results Coefficient Test Determination

Model Summary b
Model R R Adjusted Std. Error of Durbin-
Square RSquare the Estimate Watson
1 ,844 a ,820 ,775 2,114 2,544
a. Predictors: (Constant), COMPANY_AGE, SHAREHOLDERS, GCG, DER,MEDIA, ROA,
EMPLOYEE, GOVERNMENT, FIRM_SIZE
b. Dependent Variable: SR

DISCUSSION
The results derived from the multiple linear regression analysis underscore the substantial impact
of both good corporate governance and stakeholder pressure (including shareholders, employees,
government, and media) on sustainability report disclosure within the energy, raw materials, industrial,
and infrastructure sectors listed on IDX from 2020 to 2022. This aligns with contemporary views on
corporate governance, as highlighted by Dwi (2020), emphasizing a transformative role in business
practices. Sastrawan & Suaryana's (2016) perspective on corporate governance providing a structural
framework for goal-setting and performance monitoring resonates with the observed influence.
Furthermore, the study's findings correspond with Ricardo's (2017) insight into the relationship between
CSR disclosure, governance, and financial analysts' information environment. The broader scope of
sustainability reporting, as compared to CSR, is acknowledged, echoing Mohamed's (2020) work. García-
Sánchez's (2019) emphasis on Good Corporate Coverage contributing to enhanced Corporate
Sustainability Performance reinforces the discussion, highlighting the significance of governance in
bolstering stakeholder trust and overall company performance. This collective evidence emphasizes the
intricate interplay between corporate governance, stakeholder dynamics, and sustainability reporting,
vital for companies seeking not only compliance but also improved sustainability practices and
stakeholder relationships.
Shareholders wield a positive and significant influence on sustainability report disclosure,
reinforcing the findings of Gunawan (2007), who asserts that shareholder-oriented companies tend to
offer transparent information. Shareholders respond positively when provided with information that is
both transparent and indicative of the company's future capabilities. This aligns with the research
conducted by Qisthi & Fitri (2021), affirming a positive correlation between shareholder influence and
sustainability report disclosure. The alignment with stakeholder theory is evident, as the theory
emphasizes the responsibility of industries to respond to various stakeholders, including boards,
employees, and residents. In this context, shareholder interests guide organizational leadership in
maintaining the quality of life and continually improving practices that are crucial for environmental
stewardship in business operations, thereby defining sustainability as an ongoing commitment.
The impact of employees on sustainability report disclosure is underscored by the findings of
Fernandez-Feijoo (2014), Rudyanto (2018), and Alfaiz & Aryati (2019), emphasizing the workforce as a
pivotal stakeholder in transparent sustainability reporting. This perspective aligns with Huang and Kung
(2010), who posit that companies disclosing sustainability reports experience enhanced employee job
satisfaction, motivation, and a perception that the company fulfills its employee rights, thereby reducing
turnover rates and boosting overall productivity. The positive repercussions extend to increased

682 │ ISSN 2715-8071 (online)

 Khazanah Sosial, Vol. 5 No. 4: 672-687
Good Corporate Governance, Stakeholders, and Sustainability Report Disclosure
Sheila Najla Syahirah et al.

employee loyalty, fostering a more innovative and cost-effective work environment, ultimately
contributing to heightened company profits. Additionally, the favorable relationships a company
maintains with its employees can attract investor interest, especially from institutional investors, as
indicated by previous empirical studies (Hoq et al., 2010; Marietza & Alfredo, 2019; Ricardo et al., 2017).
However, it is noteworthy that the differentiation in this study lies in the fact that not all sampled
companies from the energy, raw materials, industrial, and infrastructure sectors agree to disclose
sustainability reports. Some companies choose silence, potentially out of fear of repercussions on
employee status. These results are consistent with Olarewaju & Msomi's (2021) observation that labor
responsibility is not a primary consideration for CSR performance and reporting in Indonesian companies,
reflecting low institutional pressure on energy disclosure within the country's workforce.
Government influence on companies to disclose their sustainability reports is crucial, as the
government assumes the role of an auditor with the authority to mandate such disclosures. The
government's power extends to granting or revoking permits based on the disclosed results, particularly
in cases of environmental damage, adverse effects on community health due to inadequate waste
management, or social issues like disruptions to water supplies for communities and employee-related
concerns such as insufficient salaries or benefits, as per regulations in Indonesia. Companies with
government ownership face potential pressure to provide more comprehensive information, especially
regarding employment issues and significant relationships with society. This practice of disclosure is well-
documented in literature and facilitates government oversight, enabling effective pressure on companies
to engage in socially responsible activities (Alvarez-Risco et al., 2022; Firer & Williamson, 2005; He et al.,
2017). According to He et al. (2017), government pressure has a significantly positive influence on
corporate environmental behavior. Government ownership within a company motivates compliance with
regulations, such as the mandatory publication of sustainable reports outlined in the Regulation of the
Minister of Environment and Forestry of the Republic of Indonesia Number 1 of 2021, which establishes
the Company Performance Rating Assessment Program in Environmental Management.
Media plays a significant role in influencing the disclosure of sustainability reports, aligning with
signaling theory, which emphasizes a company's inclination to communicate positive information to
showcase its positive activities and policies. Media publications, whether positive (good news) or negative
(bad news), impact public perceptions of a company's actions. This finding is consistent with the studies
of Alvarez-Risco et al. (2022) and Rodríguez-Merino (2019), which suggest that positive media reporting
can be influenced by a company's requests, sometimes leading to unreal media exposure. On the other
hand, negative news may indicate stronger media exposure, reflecting public pressure or scrutiny over
sustainability activities. The media, by leveraging the positive power of companies committed to social and
environmental responsibility, can contribute to protecting the public's interests and fostering
environmental stewardship (Lu & Abeysekera, 2014). Thus, the media plays a central role in promoting
the environmental performance of companies oriented toward sustainability reporting and, consequently,
contributes to building legitimacy through positive exposure.
Sustainability reports transcend mere documentation of environmental, social, and governance
operational performance; they serve as strategic assessment tools and communication platforms with
investors and various stakeholders. These reports function as an annual "health" check, providing insights
into a company's strengths and weaknesses, fostering a commitment to delivering outcomes that benefit
both the business and its stakeholders. In the context of Indonesian companies, sustainability reports play
a crucial role in the ESG reporting approach, showcasing the company's strategy for addressing climate
risks, engaging stakeholders, and enhancing overall ESG performance. Such reports articulate Directors'

ISSN 2715-8071 (online) │ 683

 Khazanah Sosial, Vol. 5 No. 4: 672-687
Good Corporate Governance, Stakeholders, and Sustainability Report Disclosure
Sheila Najla Syahirah et al.

responsibilities for sustainability, highlight efforts to enhance sustainability practices, and bolster the
company's credibility in the public domain. Beyond fostering transparency, sustainability reports also
demonstrate alignment with global standards, underscoring the company's steadfast commitment to
sustainability.

CONCLUSION
The conclusion of this research outlines the main findings regarding the influence of Good
Corporate Governance (GCG) and the pressure from stakeholders on the disclosure of sustainability
reports in companies in the energy, raw materials, industrial, and infrastructure sectors listed on the
Indonesia Stock Exchange (IDX). Through the purposive sampling method, the study indicates that 77.5%
of GCG and stakeholder pressures (shareholders, employees, government, and media) have a significant
impact on the disclosure of sustainability reports. However, it is acknowledged that the limitations of this
research include data collection during the Covid-19 pandemic, which may affect the fluctuation of
financial indicators for companies in the energy sector. The implications of these findings can serve as a
foundation for companies in the energy, raw materials, industrial, and infrastructure sectors to enhance
their sustainability report disclosures. Furthermore, it is recommended that the government strengthens
the legal environment, establishes standards such as the GRI Standards, and mandates audits of
sustainability reports to enhance the credibility of the information presented. These findings reflect the
importance of transparency and corporate engagement in sustainability practices as an integral part of
their business strategy.
The limitations of this research was data collected from the Covid-19 period which makes financial
performance indicators in energy sector companies fluctuate highly, there is still the possibility of other
variables being explored in future research, as a note the difference in the total contribution of R2 given by
the variables studied is still large at 22 .5%, can be used as a basis for disclosing the fact that there are other
variables that have not been studied that can contribute to the disclosure of sustainability reports, in this
context the author proposes that these other variables are pressure from Non-Governmental
Organizations as stakeholders which can influence the quality of company sustainability report
disclosures in mining sector in future research.
Future research recommended can add independent variables such as leverage, liquidity, and type
of industry and extend the research period so that it can know accurately about the effect of sustainability
report disclosure. Research implication for this research results can be used as basis by companies in the
energy, raw goods, industrial and infrastructure sectors to improve their Sustainability Report disclosures.
These can become a basis of increasing numbers of sustainability reports disclosure in energy, raw goods,
industrial and infrastructure sectors. In addition to a strong legal environment, the government also
requires to set the standards used in making sustainability report, e.g. using GRI Standards issued in 2017,
and requires audit of sustainability report to increase the credibility of the information.

REFERENCES
Alfaiz, D. R., & Aryati, T. (2019). Pengaruh Tekanan Stakeholder Dan Kinerja Keuangan Terhadap
Kualitas Sustainability Report Dengan Komite Audit Sebagai Variabel Moderasi. Jurnal
Akuntansi Dan Keuangan Methodist, 2(2), 112–130.
Allen, F., Qian, J., & Qian, M. (2005). Law, finance, and economic growth in China. Journal of Financial
Economics, 77(1), 57–116. https://doi.org/https://doi.org/10.1016/j.jfineco.2004.06.010

684 │ ISSN 2715-8071 (online)

 Khazanah Sosial, Vol. 5 No. 4: 672-687
Good Corporate Governance, Stakeholders, and Sustainability Report Disclosure
Sheila Najla Syahirah et al.

Alvarez-Risco, A., Del-Aguila-Arcentales, S., Rosen, M. A., & Yáñez, J. A. (2022). Social Cognitive
Theory to Assess the Intention to Participate in the Facebook Metaverse by Citizens in Peru
during the COVID-19 Pandemic. Journal of Open Innovation: Technology, Market, and
Complexity, 8(3). https://doi.org/10.3390/joitmc8030142
Basri, Y. M., Findayani, T. I., & Zarefar, A. (2021). Implementation of Good Governance To Improve
the Performance of Village Governments. Jurnal Akuntansi, 11(2), 123–136.
https://doi.org/10.33369/j.akuntansi.11.2.123-136
Belanusa, Z. S., Kartikasari, R., & Cahyadini, A. (2020). Urgensi Penerapan Good Corporate
Governance Pada Badan Usaha Milik Daerah Dalam Pengelolaan Minyak dan Gas Bumi
Melalui Kepemilikan Participating Interest. Jurnal Jurisprudence, 10(1), 1–14.
https://doi.org/10.23917/jurisprudence.v10i1.9974
Cormier, D., Gordon, I. M., & Magnan, M. (2004). Corporate Environmental Disclosure: Contrasting
Management’s Perceptions with Reality. Journal of Business Ethics, 49(2), 143–165.
https://doi.org/10.1023/B:BUSI.0000015844.86206.b9
Dwi, V. (2020). Pengaruh Sustainability Report Terhadap Nilai Perusahaan dengan Good Corporate
Governance sebagai Variabel Pemoderasi. Jurnal Riset Akuntansi Dan Keuangan, 8(3), 579–
594. https://doi.org/10.17509/jrak.v8i3.22841
Eberl, M., & Schwaiger, M. (2005). Corporate reputation: disentangling the effects on financial
performance. European Journal of Marketing, 39(7/8), 838–854.
https://doi.org/10.1108/03090560510601798
Fernandez-Feijoo, B., Romero, S., & Ruiz, S. (2014). Effect of Stakeholders’ Pressure on
Transparency of Sustainability Reports within the GRI Framework. Journal of Business
Ethics, 122(1), 53–63. https://doi.org/10.1007/s10551-013-1748-5
Firer, S., & Williamson, S. (2005). Institutional Knowledge at Singapore Management University Firm
Ownership Structure and Intellectual Capital Disclosures Firm ownership structure and
intellectual capital disclosures. 1–18.
García-Sánchez, I. M., Hussain, N., Martínez-Ferrero, J., & Ruiz-Barbadillo, E. (2019). Impact of
disclosure and assurance quality of corporate sustainability reports on access to finance.
Corporate Social Responsibility and Environmental Management, 26(4), 832–848.
https://doi.org/10.1002/csr.1724
Global Reporting Initiative. (2016). Gri 101: foundation 2016 101. GRI Standards, GRI101(1), 29.
Gunawan, J. (2007). Corporate Social Disclosures by Indonesian Listed Companies: A Pilot Study.
Social Responsibility Journal, 3(3), 26–34. https://doi.org/10.1108/17471110710835554
Hasan, Z. (2009). Corporate Governance: Western and Islamic Perspectives. International Review of
Business Research Papers, 5(1), 277–293.
He, X., Wada, Y., Wanders, N., & Sheffield, J. (2017). Intensification of hydrological drought in
California by human water management. Geophysical Research Letters, 44(4), 1777–1785.
https://doi.org/10.1002/2016GL071665
Hoq, M. Z., Saleh, M., Zubayer, M., & Mahmud, K. T. (2010). The effect of CSR disclosure on
institutional ownership. Pakistan Journal of Commerce & Social Sciences, 4(1), 22–39.
Huang, C.-L., & Kung, F.-H. (2010). Drivers of Environmental Disclosure and Stakeholder
Expectation: Evidence from Taiwan. Journal of Business Ethics, 96(3), 435–451.
https://doi.org/10.1007/s10551-010-0476-3
Jannah, R., & Muid, D. (2014). Analysis of Factors that Influence Carbon Emission Disclosure in
Companies in Indonesia (Empirical Study of Companies Listed on the Indonesian Stock
Exchange for the 2010-2012 Period). Diponegoro Journal of Accounting, 3(2), 1–11.
Kementerian Perencanaan Pembangunan Nasional/ Badan Perencanaan Pembangunan Nasional.
(2017). Peta Jalan Sustainable Development Goals (SDGs) di Indonesia. Kementerian
PPN/Bappenas, 35.

ISSN 2715-8071 (online) │ 685

 Khazanah Sosial, Vol. 5 No. 4: 672-687
Good Corporate Governance, Stakeholders, and Sustainability Report Disclosure
Sheila Najla Syahirah et al.

Lizarzaburu, E., & Del Brio, J. (2016). Responsabilidad social corporativa y reputación corporativa
en el sector financiero de países en desarrollo. Journal Globalization, Competitiveness and
Governability, 10(1), 42–65. https://doi.org/10.3232/GCG.2016.V10.N1.02
Lu, Y., & Abeysekera, I. (2014). Stakeholders Power , Corporate Characteristics and Social and
Environmental Disclosure : Evidence from China Yingjun Lu Shanghai University of
International Business and Economics , China Indra Abeysekera University of Wollongong
, Australia Stakeholders. Cleaner Production, 64(1), 426–436.
Madona, M. A., & Khafid, M. (2020). Pengaruh Good Corporate Governance terhadap Pengungkapan
Sustainability Report dengan Ukuran Perusahaan sebagai Pemoderasi. Jurnal Optimasi
Sistem Industri, 19(1), 22–32. https://doi.org/10.25077/josi.v19.n1.p22-32.2020
Marietza, F., & Alfredo, D. Y. (2019). Pengaruh Pengungkapan Corporate Social Responsibility
Terhadap Kepemilikan Institusional. Jurnal Akuntansi, 7(2), 71–86.
https://doi.org/10.33369/j.akuntansi.7.2.71-86
Martin, H. G., Hitchner, J., Alerding, J., Angell, J., & Morris, K. (2017). Review: Discount for Lack of
Marketability Guide and Toolkit. Analysis, and Resources for Defensible Valuations, 23(3).
Mohamed, E. Ben, Garoui, N., & Sweiti, I. (2020). On the Determinants of Environmental Information
Disclosure: Evidences from Industrial Saudi Listed Firms. 54, 2020–2054.
Olarewaju, O. M., & Msomi, T. S. (2021). Intellectual capital and financial performance of South
African development community’s general insurance companies. Heliyon, 7(4), e06712.
https://doi.org/10.1016/j.heliyon.2021.e06712
Putri, I. S., Friantin, S. H. E., & Aryanto, D. (2021). The Influence of Corporate Governance Perception
Index, Profitability, and Company Size on Stock Value on Go Public Companies at CGPI
Listed on the Indonesia Stock Exchange. Daengku: Journal of Humanities and Social Sciences
Innovation, 1(2), 130–138. https://doi.org/10.35877/454ri.daengku627
Qisthi, F., & Fitri, M. (2021). Pengaruh Keterlibatan Pemangku Kepentingan Terhadap
Pengungkapan Laporan Keberlanjutan Berdasarkan Global Reporting Initiative (Gri) G4.
Jurnal Ilmiah Mahasiswa Ekonomi Akuntansi, 5(4), 469–484.
https://doi.org/10.24815/jimeka.v5i4.16042
Renaldo, N., Suhardjo, Suyono, Andi, Veronica, K., & David, R. (2022). Good Corporate Governance
Moderates the Effect of Environmental Performance and Social Performance on Financial
Performance. International Conference on Business Management and Accounting (ICOBIMA),
1(1), 1–9.
Ricardo, R. A., Akuntansi, D., Ekonomika, F., & Diponegoro, U. (2017). SOSIAL PERUSAHAAN DAN
KEPEMILIKAN INSTITUSIONAL. 6, 1–12.
Rodríguez-Merino, P. A. (2019). Old ‘counter-revolution’, new ‘terrorism’: historicizing the framing
of violence in Xinjiang by the Chinese state. Central Asian Survey, 38(1), 27–45.
https://doi.org/10.1080/02634937.2018.1496066
Rudyanto, A., & Veronica Siregar, S. (2018). The effect of stakeholder pressure and corporate
governance on the sustainability report quality. International Journal of Ethics and Systems,
34(2), 233–249. https://doi.org/10.1108/IJOES-05-2017-0071
Rupley, K. H., Brown, D., & Marshall, R. S. (2012). Governance, media and the quality of
environmental disclosure. Journal of Accounting and Public Policy, 31(6), 610–640.
https://doi.org/10.1016/j.jaccpubpol.2012.09.002
Sastrawan, I. M. D., & Suaryana, I. G. N. A. (2016). Pengaruh Langsung Dan Tidak Langsung Good
Corporate Governance Terhadap Pengungkapan Tanggung Jawab Sosial Perusahaan. E-
Jurnal Akuntansi Universitas Udayana, 14.1, 371–398.
Shatnawi, S. A., Eldaia, M., Marei, A., & Aaraj, S. AL. (2021). The Relationship between Audit
Committee Characteristics on Accounting-based Performance (ROA and ROE) as a Measure
of Performance Evidence from Jordan. International Journal of Business and Digital
Economy, 2(2), 15–27.

686 │ ISSN 2715-8071 (online)

 Khazanah Sosial, Vol. 5 No. 4: 672-687
Good Corporate Governance, Stakeholders, and Sustainability Report Disclosure
Sheila Najla Syahirah et al.

Strozzilaan, B. (2021). GRI Universal Standards Project – GSSB basis for conclusions Summary of
Public Comments on the Exposure Draft of the Standards , and GSSB Responses. GRI Universal
Standards Project.
Suharyani, R. (2019). Pengaruh Tekanan Stakeholder Dan Corporate Governance Terhadap
Kualitas Sustainability Report. Jurnal Akademi Akuntansi, 2(1).
https://doi.org/10.22219/jaa.v2i1.8356
Tjahjadi, B., Soewarno, N., & Mustikaningtiyas, F. (2021). Good corporate governance and corporate
sustainability performance in Indonesia: A triple bottom line approach. Heliyon, 7(3),
e06453. https://doi.org/10.1016/j.heliyon.2021.e06453

ISSN 2715-8071 (online) │ 687