Sustainability reporting practices have developed rapidly since their early inception. There are three decades of evolution in the periodical: 1990–2000, 2000–2010, and 2010 – present time. Before the mid-1990s, early reporting was part of a corporation’s annual report, with limited information (Boiral and Heras-Saizarbitoria, 2020; Tschopp and Nastanski, 2014). The literature surrounding sustainability developed rather slowly due to theoretical difficulties, with the first significant academic contribution initiated in 1993 from Pearce and Atkinson’s measurement on the sustainability of economies (Pezzey and Toman, 2002). The development was followed by the ground-breaking concept of Triple Bottom Line (TBL) by Elkington (1997), which urged corporations to focus on the environmental and social impacts, in addition to economic performances. According to Deegan and Rankin (1999), for an organization to be sustainable, it must meet the prerequisites of financial security, limit adverse ecological impact, and accommodate society’s ideals. From 2000 to 2010, the normalization of companies publishing separate sustainability reports started to show, as seen in a 29% increase of Global Fortune Top 250 companies publishing reports (KPMG, 2002). In addition, industry members displayed a considerable commitment to sustainability reporting (Karaman et al., 2018). Within the last decade, sustainability reporting has continued to spread out throughout different regions and industry sectors.

In the Asia Pacific, Corporate Responsibility reporting rates had risen from 49% to 71% in 2013 (KPMG, 2017). In a study of non-financial firms from Japan, South Korea, India, and Indonesia, Laskar (2018) found that the region had increased their reports significantly from 2009 to 2014, with Japan leading the trend and Indonesia falling behind. KPMG surveys showed fast development within the Asia Pacific, increasing 8% between 2013 and 2015 (KPMG, 2015; KPMG, 2017). In India, Kumar et al. (2018) discovered that the country’s top 10 (ten) banks had primarily published poor sustainability reports. In Europe, it had grown from 71% to 73% in 2013. Meanwhile, Latin America faced a growth of 69%–79% in 2013 and 77%–83% in 2017. Low reporting rates are typically in the Middle East, Africa, and Eastern Europe (KPMG, 2017). The US faced considerably low levels of sustainability reporting, with only 6.2% of companies implementing them. Most companies that published the sustainability report were either public/listed companies (79.1%), large companies (50.3%), or multinational enterprises (44.14%). The majority came from the energy and utility sector (14%), financial services (11.6%), or food and beverages (10.2%) (Centre for Sustainability and Excellence, 2017). A study by KPMG in 2017 discovered that the industry sectors with the most reporting came from oil and gas (81%), chemicals (81%), mining (80%), and automotive (79%). Most of the G250 companies aimed to cut their carbon emissions, from 58% to 67% of companies. Most companies also recognize that human rights issues are synonymous with business issues (KPMG, 2017).

Therefore, the research conducted by Gunawan et al (2022) investigates the extent to which Indonesian companies have prepared sustainability reporting since the beginning (2006) to the mandatory regulation issued by Financial Service Authorities (2017). The characteristic of environmental-sensitive and non-sensitive companies in preparing sustainability reporting were also examined. This study attempts to provide information on sustainability reporting practices by collecting quantitative data through content analysis of companies’ sustainability reports. The stand-alone sustainability reports of the companies during the period of 2006–2019 were used to extract the sustainability disclosures, revealing 887 sustainability reports evaluation. The study finds that the sustainability reporting trend in Indonesia increases from year to year. Indonesian companies (sensitive and non-sensitive industry) mainly disclosed most information on economic information, social, and followed by environmental aspects. The second most disclosed by sensitive industry is community engagement, while one disclosed by the non-sensitive industry is information related to the new employee and employee turnover. The Human Rights indicators have the lowest disclosure percentage among others.

Sources:

  • Google Image. (2022). Shutterstock.
  • Boiral, O., Heras-Saizarbitoria. (2020). Sustainability reporting assurance: creating stakeholder accountability through hyperreality?. Journal of Cleaner Production. 10, 118596 https:// doi.org/10.1016/j.jclepro.2019.118596
  • Centre for Sustainability and Excellence. (2017). Sustainability Reporting Trends in North America available at: https://cse-net.org/sustainability-reporting-trends-in-north-america/.
  • Deegan C., and Rankin M. (1999). The Environmental Accounting Expectations Gap: Australian Evidence. Br. Account. Rev. 31(3), 313-346.
  • Elkinton J. (1997). Cannibals with Forks – Triple Bottom Line of 21st Century Business. New Society Publishers, Stoney Creek CT.
  • Gunawan J., Permatasari P., Fauzi H. (2022). The evolution of sustainability reporting practices in Indonesia. Journal of Cleaner Production. 358, 131798. https://doi.org/10.1016/j.jclepro.2022.131798