Analyzing the Role of Sustainability Reporting in Enhancing Corporate Image and Shareholder Value

Hengky Budi Priyanto, Andi Sawe Ri Esso

Abstract


The growing emphasis on environmental, social, and governance (ESG) issues has positioned sustainability reporting as a central mechanism for strengthening stakeholder trust and organizational legitimacy. Unlike traditional disclosures focused solely on compliance, sustainability reporting reflects a broader strategic orientation where transparency and accountability can reinforce both corporate image and shareholder value. This study explores the role of sustainability reporting by synthesizing insights from prior scholarly works, corporate case studies, and international frameworks. Adopting a qualitative literature-based approach, the analysis applies thematic coding to classify findings into areas such as corporate reputation, stakeholder engagement, risk management, and long-term financial performance. Data were collected from peer-reviewed journal articles, annual reports, and sustainability disclosures, with selection guided by inclusion criteria that prioritized relevance, credibility, and recency. Findings indicate that robust and credible sustainability reports serve as more than communication tools; they operate as governance instruments that reduce information asymmetry, strengthen legitimacy, and enhance investor confidence. Companies that integrate sustainability disclosures into their strategic positioning—such as Unilever and Nestlé—demonstrate stronger reputational capital, enjoy lower capital costs, and attract long-term institutional investors. Conversely, symbolic or superficial reporting may undermine trust and trigger reputational risks. This study contributes theoretically by deepening the understanding of sustainability reporting as a driver of intangible assets such as image and reputation, while also offering practical guidance for firms aiming to balance transparency with value creation.


Keywords


Sustainability Reporting, Corporate Image, Shareholder Value.

Full Text:

PDF

References


Booth, A., Sutton, A., & Papaioannou, D. (2016). Systematic approaches to a successful literature review. Sage.

Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology, 3(2), 77–101. https://doi.org/10.1191/1478088706qp063oa

Cheng, B., Ioannou, I., & Serafeim, G. (2014). Corporate social responsibility and access to finance. Strategic Management Journal, 35(1), 1–23. https://doi.org/10.1002/smj.2131

Cho, C. H., Laine, M., Roberts, R. W., & Rodrigue, M. (2015). Organized hypocrisy, organizational façades, and sustainability reporting. Accounting, Organizations and Society, 40(1), 78–94. https://doi.org/10.1016/j.aos.2014.12.003

Clarkson, P. M., Li, Y., Richardson, G. D., & Vasvari, F. P. (2008). Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis. Accounting, Organizations and Society, 33(4–5), 303–327. https://doi.org/10.1016/j.aos.2007.05.003

Clarkson, P. M., Li, Y., Richardson, G. D., & Vasvari, F. P. (2013). The impact of environmental disclosure on the cost of capital: Evidence from the U.S. Accounting Review, 88(2), 531–565. https://doi.org/10.2308/accr-50331

Denyer, D., & Tranfield, D. (2009). Producing a systematic review. In D. Buchanan & A. Bryman (Eds.), The Sage handbook of organizational research methods (pp. 671–689). Sage.

Dhaliwal, D. S., Li, O. Z., Tsang, A., & Yang, Y. G. (2011). Voluntary nonfinancial disclosure and the cost of equity capital: The initiation of corporate social responsibility reporting. Accounting Review, 86(1), 59–100. https://doi.org/10.2308/accr.00000005

Du, S., Bhattacharya, C. B., & Sen, S. (2010). Maximizing business returns to corporate social responsibility (CSR): The role of CSR communication. International Journal of Management Reviews, 12(1), 8–19. https://doi.org/10.1111/j.1468-2370.2009.00276.x

Eccles, R. G., Ioannou, I., & Serafeim, G. (2014). The impact of corporate sustainability on organizational processes and performance. Management Science, 60(11), 2835–2857. https://doi.org/10.1287/mnsc.2014.1984

Eccles, R. G., Ioannou, I., & Serafeim, G. (2014). The impact of corporate sustainability on organizational processes and performance. Management Science, 60(11), 2835–2857. https://doi.org/10.1287/mnsc.2014.1984

Eccles, R. G., Youmans, T., & Serafeim, G. (2013). The performance frontier: Innovating for a sustainable strategy. Harvard Business Review, 91(5), 50–60.

Fatemi, A., Glaum, M., & Kaiser, S. (2018). ESG performance and firm value: The moderating role of disclosure. Global Finance Journal, 38, 45–64. https://doi.org/10.1016/j.gfj.2017.03.001

Fernando, G. D., Jain, S., & Tripathy, A. (2017). An empirical analysis of the association between sustainability disclosure and firm value. Review of Accounting and Finance, 16(2), 217–235. https://doi.org/10.1108/RAF-11-2015-0182

Frias‐Aceituno, J. V., Rodríguez‐Ariza, L., & Garcia‐Sánchez, I. M. (2014). Explanatory factors of integrated sustainability and financial reporting. Business Strategy and the Environment, 23(1), 56–72. https://doi.org/10.1002/bse.1765

Friede, G., Busch, T., & Bassen, A. (2015). ESG and financial performance: Aggregated evidence from more than 2000 empirical studies. Journal of Sustainable Finance & Investment, 5(4), 210–233.

Gray, R., Kouhy, R., & Lavers, S. (1995). Corporate social and environmental reporting: A review of the literature and a longitudinal study of UK disclosure. Accounting, Auditing & Accountability Journal, 8(2), 47–77. https://doi.org/10.1108/09513579510146996

Hahn, R., & Kühnen, M. (2013). Determinants of sustainability reporting: A review of results, trends, theory, and opportunities in an expanding field of research. Journal of Cleaner Production, 59, 5–21. https://doi.org/10.1016/j.jclepro.2013.07.005

Ioannou, I., & Serafeim, G. (2015). The impact of corporate social responsibility on investment recommendations. Financial Analysts Journal, 70(4), 23–41. https://doi.org/10.2469/faj.v70.n4.1

Khan, M., Serafeim, G., & Yoon, A. (2020). Corporate sustainability: First evidence on materiality. The Accounting Review, 91(6), 1697–1724. https://doi.org/10.2308/accr-51022

Khatri, I. (2023). Sustainability reporting practices and environmental legitimacy. Environmental Science and Pollution Research, 30(3), 6505–6520.

Kitchenham, B., & Charters, S. (2007). Guidelines for performing systematic literature reviews in software engineering. EBSE.

Kotsantonis, S., Pinney, C., & Serafeim, G. (2016). ESG integration in investment management: Myths and realities. Journal of Applied Corporate Finance, 28(2), 10–16. https://doi.org/10.1111/jacf.12169

Lo, S. F., & Sheu, H. J. (2007). Is corporate sustainability a value‐increasing strategy for business? Corporate Governance: An International Review, 15(2), 345–358. https://doi.org/10.1111/j.1467-8683.2007.00565.x

Luo, X., Wang, H., Raithel, S., & Zheng, Q. (2015). Corporate social performance, analyst stock recommendations, and firm future returns. Strategic Management Journal, 36(1), 123–136. https://doi.org/10.1002/smj.2219

Michelon, G., Pilonato, S., & Ricceri, F. (2015). CSR reporting practices and the quality of disclosure: An empirical analysis. Critical Perspectives on Accounting, 33, 59–78. https://doi.org/10.1016/j.cpa.2014.10.003

Morsing, M., & Schultz, M. (2006). Corporate social responsibility communication: Stakeholder information, response and involvement strategies. Business Ethics: A European Review, 15(4), 323–338. https://doi.org/10.1111/j.1467-8608.2006.00460.x

Snyder, H. (2019). Literature review as a research methodology: An overview and guidelines. Journal of Business Research, 104, 333–339. https://doi.org/10.1016/j.jbusres.2019.07.039

Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20(3), 571–610.

Unilever. (2014). Unilever Sustainable Living Plan: Scaling for Impact – Summary of Progress 2014. Unilever.

Velte, P. (2017). Does ESG performance have an impact on financial performance? Evidence from Germany. Journal of Global Responsibility, 8(2), 169–178.

Webster, J., & Watson, R. T. (2002). Analyzing the past to prepare for the future: Writing a literature review. MIS Quarterly, 26(2), xiii–xxiii.

Xiao, Y., & Watson, M. (2019). Guidance on conducting a systematic literature review. Journal of Planning Education and Research, 39(1), 93–112. https://doi.org/10.1177/0739456X17723971




DOI: https://doi.org/10.24815/jr.v8i4.49301

Article Metrics

Abstract view : 37 times
PDF - 15 times

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

__________________________________________________________

Riwayat: Educatioanl Journal of History and Humanities


Published: Departemen of History Education, Faculty of Teacher Training and Education, Universitas Syiah Kuala, Provinsi Aceh. Indonesia

Situs web: https://jurnal.usk.ac.id/riwayat
Email: riwayat@usk.ac.id

Lisensi Creative Commons
Karya ini dilisensikan di bawah Lisensi Internasional Creative Commons Atribusi-BerbagiSerupa 4.0.