The Influence of Stakeholder Pressure and Ownership Structure on Sustainability Report Quality

AbstractPurpose – This study aims to determine the influence of stakeholder pressure and ownership structure on the quality of sustainability reports in non-financial sector companies listed on the Indonesian Stock Exchange (IDX) from 2021 to 2023.Design/methodology/approach – This research is causal research using a quantitative approach. The sampling method used was purposive sampling, resulting in 78 non-financial sector companies listed on the Indonesia Stock Exchange (IDX) from 2021 to 2023. This study uses data from annual reports and corporate sustainability reports which are analyzed using panel regression.Findings – The results show that foreign ownership has a positive effect on the quality of sustainability reports. Meanwhile, other factors such as employee pressure and shareholder pressure do not affect on the quality of sustainability reports. Therefore, the results of this study indicate that foreign ownership is the most influential factor in the quality of sustainability reports. Originality/value – This study makes a novel contribution to the literature on stakeholder pressure and ownership structure in relation to sustainability report quality by focusing on the Indonesian context as an emerging market. This research not only fills a gap in the existing literature, but also provides valuable insights into the challenges and opportunities faced by companies in Indonesia in implementing quality sustainability reports. Research limitations/implications – Research on sustainability report disclosure is still limited in Indonesia, mainly because there are still many companies that have not disclosed sustainability report quality practices. As a result, the availability of data from companies that disclose sustainability report quality information is limited. Furthermore, this study also has generalization limitations from the sample and research period which may provide opportunities for further research. The findings of this study may motivate companies to adopt more comprehensive and accurate sustainability reporting practices that are aligned with international reporting standards. The results of this study make a significant contribution to the existing literature on the impact of stakeholder pressure and ownership structure on the quality of sustainability reports.Keywords: Sustainability report quality; stakeholder pressure; ownership structure.Article Type: Research Paper