Does Sustainability Disclosure Affect Firm Value? The Moderating Role of Independent Commissioners in Energy Sector Firms
DOI:
https://doi.org/10.35870/ijmsit.v6i2.7730Keywords:
Sustainability Disclosure, Firm Value, Independent Commissioners, Energy Sector, GRI 11Abstract
This research investigates the influence of sustainability disclosures covering economic, environmental, and social dimensions on corporate valuation (Price to Book Value) while examining the moderating influence of independent board members within the Indonesian energy industry. Grounded in Signaling and Institutional Theories, the study adopts a quantitative causal framework using panel data from 40 IDX-listed energy entities spanning 2021 to 2024 (160 firm-year observations). Non-financial reporting quality was quantified through content analysis integrating the GRI Universal Standards 2021 and sector-specific GRI 11 guidelines, controlling for profitability (ROA) and liquidity (Current Ratio). Content analysis findings indicate divergent reporting priorities: social metrics recorded the highest compliance at an average of 59%, followed by environmental disclosure at 34%, and economic disclosure at 19%. Empirical estimation reveals that among the three ESG pillars, only social reporting yields a direct, positive, and statistically significant effect on firm value, whereas economic and environmental disclosures fail to show a significant direct impact. Furthermore, independent commissioners significantly moderate these relationships, strengthening the positive impact of environmental disclosures while negatively moderating social disclosures. The content analysis scores provide contextual insights in the discussion, illustrating how market participants evaluate material issues in high-risk sectors. These findings emphasize the necessity for regulatory bodies like the OJK to enforce sector-specific standards such as GRI 11 to enhance market transparency.
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