Sustainability reporting in Indonesian listed banks: Do corporate governance, ownership structure and digital banking matter?

Abstract

Purpose

The purpose of this paper is to find empirical evidence of ownership structure and corporate governance (CG) effect on sustainability reporting in Indonesian listed banks. The study also tries to describe sustainability reporting disclosure practice.

Design/methodology/approach

The authors analyze balanced panel data with a total of 155 observations from 2012 to 2016 using panel data regression.

Findings

The findings present empirical evidence that sustainability reporting in Indonesian listed banks is still low. CG, foreign ownership and family ownership positively influence sustainability reporting. Further, the authors find that family ownership weakens the effect of CG while foreign ownership has no significant moderating role. Digital banking is not a significant determinant and OJK sustainable finance roadmap is evidenced to have no impression on bank intention to produce sustainability report.

Research limitations/implications

The use of content analysis method for variable measurement may contain subjectivity substance from the researcher’s perspective. Further research works need confirmation from independent parties with expertise in this subject. Further research works can also implement the mixed method by combining quantitative and qualitative approach to gain better quality.

Practical implications

The result of this study underlines the need for sustainability reporting improvement, followed by suggestions for Indonesian banking regulator.

Originality/value

This paper provides a description of Indonesian banks sustainability reporting and evidence of CG and controlling owner’s role in its practice. The research presents a novelty, examining the role of digital banking as determinant.

Citation

Amidjaya, P.G. and Widagdo, A.K. (2020), "Sustainability reporting in Indonesian listed banks: Do corporate governance, ownership structure and digital banking matter?", Journal of Applied Accounting Research, Vol. 21 No. 2, pp. 231-247. https://doi.org/10.1108/JAAR-09-2018-0149