Sustainability Report Disclosure and Firm Value: The Mediating Role of Corporate Reputation

Abstract

This research analyzes and proves the effect of sustainability report disclosure on firm value,
measured based on overall disclosure and economic, environmental, and social performance
aspects. It also examines the mediating role of corporate reputation in this relationship. The
study focuses on companies listed in the IDX ESG Leaders from 2020 to 2023, using a 
purposive sampling technique and obtaining 14 companies with 56 units of analysis. 
Sustainability report disclosure is measured using the GRI standard, which contains three main
aspects: economic, environmental, and social performance. Firm value is measured by Price to
Book Value (PBV), and corporate reputation is proxied by the number of awards received. The
data used are secondary data in the form of annual reports and sustainability reports, which are
analyzed using a quantitative approach with the panel data path analysis method. The results
show that sustainability report disclosure, whether measured as a whole or based on aspects of
economic, environmental, and social performance, has no significant effect on firm value. In
addition, corporate reputation also cannot mediate the relationship between sustainability
report disclosure and firm value. These findings indicate that although the sustainability report
has been disclosed, it has not been able to be a significant factor in increasing firm value. This
study provides insight into the fact that sustainability disclosure requires a more integrated
strategy to have a real impact on firm value.