The The impact of materiality and stakeholder engagement on firm sustainability reporting

Shafira Salsabilla; Erwin Saraswati; Wuryan Andayani

doi:10.22219/jibe.v8i01.30670

Authors

Shafira Salsabilla Department of Accounting, Faculty of Economics and Business, Universitas Brawijaya Malang, Indonesia
Erwin Saraswati Department of Accounting, Faculty of Economics and Business, Universitas Brawijaya Malang, Indonesia
Wuryan Andayani Department of Accounting, Faculty of Economics and Business, Universitas Brawijaya Malang, Indonesia

DOI:

https://doi.org/10.22219/jibe.v8i01.30670

Keywords:

Materiality, stakeholder, firm, sustainability

Abstract

This paper empirically examines the influence of materiality and stakeholder engagement on the quality of sustainability reports in manufacturing companies in Indonesia from 2017 to 2022. The quality of sustainability reporting is measured using four index dimensions: relative quantity of disclosure, density, accuracy, and management orientation. Materiality and stakeholder engagement are assessed using a content analysis methodology, with relevance of disclosure as the measurement criterion. The regression analysis reveals that materiality has a significant negative effect on the quality of sustainability reporting. Conversely, stakeholder engagement has a significant positive effect on the quality of sustainability reporting. These findings highlight a potential trade-off: an excessive emphasis on materiality may lead to the omission of other critical components, thereby reducing the overall quality and comprehensiveness of sustainability reporting.

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References

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http://dx.doi.org/10.1016/0361-3682(82)90025-3