The Effect of Sustainability Report and Profitability on Company Value in Manufacturing Companies Listed on the Indonesia Stock Exchange for the 2022-2024 Period
Keywords:
Sustainability Report; Profitability; Company Value; Manufacturing Companies; Indonesia Stock ExchangeAbstract
This study aims to analyze and empirically test the influence of sustainability report and profitability to the value of companies in the manufacturing sector listed on the Indonesia Stock Exchange (IDX) during the 2022–2024 period. The phenomenon of increasing adoption of sustainability reports reaching 94% by 2024 (IDX, 2024, n.d.) and the existence of POJK regulation Number 60/POJK.04/2017 is the background for the importance of transparency in environmental, social, and governance (ESG) aspects in influencing company value. The research method used is quantitative with a causal associative approach. The research population includes all manufacturing companies in the IDX as many as 242 companies, with a sampling technique using purposive sampling which produces 151 companies as the final sample (a total of 453 observations over 3 years). Variable sustainability report measured using the GRI disclosure index, profitability is measured by Return on Assets (ROA), and company value is measured by Tobin's Q ratio. The results of the study show that profitability has a positive and significant effect on the company's value, which indicates that the company's ability to generate profits is still the main consideration for investors. Meanwhile, sustainability reports do not show a significant influence on company value, which indicates that sustainability disclosure has not been fully a dominant factor in the formation of a company's market value. This finding implies that financial performance is still more appreciated by the market than non-financial disclosures in the context of the Indonesian capital market.
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