Fostering Sustainability Reporting to Encourage Profitability in Indonesian Building Construction Industry Astrie Krisnawati, Rahma Dwi Aniza
Faculty of Economics and Business, Telkom University
Jalan Telekomunikasi No. 1 Terusan Buahbatu, Bandung 40257, Indonesia
Abstract
Every business has the main objective to generate maximum profits. However, businesses have responsibilities to contribute to society and environment. Sustainability reporting is a way for businesses to show their social and environmental concerns. Sustainability reporting is one of the assessment indicators considered by investors when making investment decisions. This study aims to obtain empirical evidence regarding the effect of sustainability reporting on company^s profitability. The objects of this study are five companies in the Indonesian building construction sector as the result of purposive sampling technique. The data collection is carried out using content analysis method to investigate the disclosure in their sustainability reports. The analysis is conducted through panel data regression. The finding of this research shows that sustainability reporting significantly affects profitability which is proxied by Return on Equity (ROE). Due to some limitations, this research gives implications for further research to use other proxies for the dependent variable, such as Earning per Share or Net Profit Margin.
Keywords: Sustainability Reporting- Profitability- Return on Equity
