THE EFFECT OF DISCLOSURE OF ECONOMIC, ENVIRONMENTAL AND SOCIAL DIMENSIONS IN THE SUSTAINABILITY REPORT ON COMPANY'S FINANCIAL PERFORMANCE MODERATED BY COMPANY SIZE

Abstract

This study examines the impact of Sustainability Report disclosure on corporate financial performance, with firm size as a moderating variable, using data from consumer non-cyclical companies listed on the Indonesia Stock Exchange. The Sustainability Report is measured using the Sustainability Reporting Disclosure Index (SRDI), encompassing three main dimensions: economic (EKO), environmental (ENV), and social (SOS). Financial performance is represented by the Return on Assets (ROA) indicator. From a population of 128 companies, 14 were selected as samples through purposive sampling, resulting in 42 observations over the 2021-2023 period. A quantitative approach was employed, utilizing Moderated Regression Analysis (MRA) with SPSS version 25 software. The findings reveal that the economic dimension disclosure has a significant negative effect on financial performance, while the environmental dimension shows a significant positive effect. Conversely, the social dimension has a negative but insignificant impact. Furthermore, firm size weakens the relationship between the environmental dimension and financial performance but does not moderate the effects of the economic and social dimensions. This study highlights the importance of measurable and balanced Sustainability Report disclosures in creating added value for companies and provides strategic insights for management in formulating sustainability policies to enhance financial performance.