https://dinastipub.
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No.
4, 2025
DOI: https://doi.
org/10.
38035/dijefa.
https://creativecommons.
org/licenses/by/4.
The Effect of Shareholder Pressure.
Profitability.
Leverage and Company Size on the Sustainability Report Quality Putu Dias Listya Dewi1*.
Gerianta Wirawan Yasa2 Fakultas Ekonomi dan Bisnis.
Universitas Udayana.
Bali.
Indonesia, diaslistyadewi@gmail.
Fakultas Ekonomi dan Bisnis.
Universitas Udayana.
Bali.
Indonesia Corresponding Author: diaslistyadewi@gmail.
Abstract: This study was conducted to examine the effect of shareholder pressure, profitability, leverage, and company size on the sustainability report quality.
The population in this study are banking companies listed on the Indonesia Stock Exchange for the period 20212023.
The sampling technique used was purposive sampling, which resulted in 27 companies as samples with a total of 77 observation data.
Data analysis was carried out using the multiple linear regression method.
The results showed that shareholder pressure and profitability have no effect on the sustainability report quality.
Leverage and company size have a positive effect on the sustainability report quality.
Keywords: Sustainability Report Quality.
Shareholder Pressure.
Profitability.
Leverage.
Company Size.
INTRODUCTION
In the current global business environment, companies are not only expected to achieve financial success, but also to consider their contribution to the environment and social welfare.
(Arrokhman & Siswanto, 2.
Companies are expected to commit to environmental sustainability and demonstrate social awareness by providing information related to Corporate Social Responsibility (CSR).
One tangible form of this commitment is the preparation of highquality sustainability reports, which reflect the company's transparency in managing the social and environmental impacts resulting from their activities.
Sustainability report is a report prepared by a company to inform stakeholders about the various impacts of its operational activities on economic, environmental, and social aspects (Darmawan & Sudana, 2.
Sustainability report quality a report that follows reporting standards, and conveys important information for stakeholders.
The standards commonly used in preparing sustainability reports are the GRI Standards (Silvana & Khomsyiah, 2.
Sustainability reporting using the GRI Standards guidelines aims to ensure transparency regarding how organizations contribute to sustainable development.
GRI standards are used to evaluate the quality of sustainability reports, which evaluate how comprehensive the reports are (Suharyani et al.
, 2.
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Environmental issues in Indonesia are often caused by various activities carried out by companies, particularly in the industrial, mining, and manufacturing sectors (Xaverius et al.
The banking sector, as a business sector providing financial services, is considered to have no direct connection to environmental impacts, so this sector is not a primary focus.
However, in reality, the banking sector is the largest provider of loans for industrialization and exploitation activities (Ronaldo & Handayani, 2.
The government, through the OJK, has issued POJK No.
51/POJK.
03/2017, which encourages banking companies to support sustainable business practices, including through green financing (Ho et al.
, 2.
The policy states that banking companies must support priority sectors that support sustainable finance, such as financing for renewable energy projects, energy efficiency, and green building projects.
The use of GRI Standards in preparing sustainability reports for banking companies can contribute to greater openness, accountability, and credibility of the reports presented.
However, the implementation of GRI Standards as guidelines for preparing sustainability reports in the banking sector has not yet been fully implemented.
Out of the 47 banking companies listed on the Indonesia Stock Exchange from 2021 to 2023, 41 companies published sustainability reports in 2021, and in 2022-2023, this number increased to 43 companies.
Companies are subject to pressure from shareholders to conduct business in a way that meets their needs and preferences.
Although shareholders tend to focus on short-term profits, with the passage of time, sustainability aspects have become important to consider as they reflect a company's responsibility to the environment and society.
Shareholders can provide guidance to organizational leadership in developing practices that are important for environmental management in business activities (Syahirah et al.
, 2.
Companies with good profitability will influence the sustainability reports produced.
Company with strong profitability has sound financial standing, so the sustainability reports disclosed will be of higher quality to meet the expectations of stakeholders (Gunawan & Sjarief, 2.
High leverage in a company is also an indicator that can influence sustainability report quality produced by the company.
Companies whose that rely heavily on outside funding or creditors will have high leverage and will typically provide additional details to creditors to prove that the company can meet its financial needs (Maryana & Carolina, 2.
Companies with high leverage will strive to increase stakeholder confidence by improving the quality of their sustainability reports.
Big businesses that engage in more activities have a lot of stakeholders and are inextricably linked to social responsibility.
therefore, the corporation will reveal all relevant information to gain recognition from stakeholders (Darmawan & Sudana, 2.
Companies with high leverage will strive to increase stakeholder confidence by improving the quality of their sustainability reports.
Previous studies have shown inconsistent results.
Research conducted by Hidayah et al.
, and Syahirah et al.
found that shareholder pressure has a positive effect on the quality of sustainability reports.
Research by Arrokhman & Siswanto .
and Putri & NR .
found opposite results, indicating that shareholder pressure has a negative impact on the sustainability report quality.
Research conducted by Silvana & Khomsyiah .
and Fadilla et al.
states that profitability has a positive effect on the sustainability report quality.
Alfaiz & Aryati .
study produced different findings, concluding that sustainability report quality is unaffected by profitability.
Leverage improves the sustainability report quality, according to research by Saraswati et al.
, and Ho et al.
On the other hand, the research by Silvana & Khomsyiah .
shows the opposite result, that leverage has a negative effect on the sustainability report quality.
Regarding the company size variable, research conducted by Arrokhman & Siswanto .
, dan Choirunisah et al.
states the quality of sustainability report is positively impacted by the size of the company.
According to Wahyudi & Bait .
research, company size does not affect the sustainability report quality.
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The purpose of this study was to reexamine the variables shareholder pressure, profitability, leverage, and firm size that can affect the sustainability report quality.
According to the stakeholder theory, businesses must answer to all parties impacted by their operations, including suppliers, customers, employees, the government, the community, and the environment, in addition to their own interests (Freeman, 1.
In this case, good communication and interaction between the company and stakeholders are key factors.
When a company is able to meet the expectations of its stakeholders, the potential to create long-term value and maintain business continuity will be greater.
Shareholder pressure is a form of oversight exercised by shareholders by demanding accurate disclosure of company information to ensure the smooth operation of the business (Darmawan & Sudana, 2.
In accordance with stakeholder theory, shareholders are entitled to obtain various types of information.
Share ownership concentration can affect the quality of sustainability report disclosure, as controlling groups may collude in determining policy (Correa-Garcia et al.
, 2.
Shareholder pressure serves as external oversight that encourages companies to improve accountability, social responsibility, and ensure compliance with global sustainability standards such as GRI.
Hidayah et al.
Syahirah et al.
, and Ayustin & Zaitul .
have found that shareholder pressure improves the quality of sustainability H1: Shareholder pressure has a positive effect on the sustainability report quality Profitability is one of the indicators that can show a company's financial performance.
accordance with stakeholder theory, companies must be more active in carrying out social activities because stakeholders expect transparency of information regarding actions taken by the company.
(Gunawan & Sjarief, 2.
Companies with high profitability have a greater ability to meet stakeholder expectations in terms of social responsibility.
Companies also have good financial resources to disclose quality sustainability reports, thereby demonstrating their commitment to sustainability practices.
Previous studies conducted by Silvana & Khomsyiah .
, and Fadilla et al.
state profitability improves the quality of sustainability report.
H2: Profitability has a positive effect on the sustainability report quality.
Companies that rely on third parties or creditors as their main source of capital have high financial leverage.
According to stakeholder theory, companies with high leverage need to demonstrate their commitment to sustainability and social responsibility to maintain their reputation in the eyes of stakeholders, including creditors, investors, the government, and the public (Gunawan & Sjarief, 2.
One strategy that can be used is to disclose high quality sustainability reports to maintain a positive image and demonstrate that the company remains accountable for social and environmental aspects.
Previous studies by Saraswati et al.
Ho et al.
, and Widyawati et al.
state that leverage improves the quality of sustainability report.
H3: Leverage has a positive effect on the sustainability report quality Company size refers to the amount of wealth owned by the company, based on total assets, total revenue, number of employees, market capitalization, and so on (Tobing et al.
In accordance with stakeholder theory, companies can demonstrate that they do not ignore the impacts of their operational activities by disclosing this information in sustainability report (Indrianingsih & Agustina, 2.
Large companies have greater potential to damage the environment and involve more stakeholders in their business activities.
These large companies pay more attention to sustainability aspects, which is reflected in the quality of their sustainability reports.
Research conducted by Arrokhman & Siswanto .
Barung .
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Gaffar et al.
, and Choirunisah et al.
, states that company size improves the quality of sustainability report.
H4: Company size has a positive effect on the sustainability report quality.
METHOD
This study focuses on the banking sector listed on the Indonesia Stock Exchange from 2021 to 2023 by accessing financial reports and sustainability reports on the official IDX website or on the official pages of each company.
This study uses a quantitative approach.
The population consisted of 47 banking companies listed on the IDX during that time period, and a purposive sampling technique was used to determine the sample.
Based on the sample selection results, 25 company samples were obtained in 2021, 26 company samples in 2022, and 2023.
The total number of observations during the period from 2021 to 2023 was 77 observations.
Sustainability report quality refers to the extent to which the reports are able to which the report presents transparent, relevant, and accurate information regarding environmental, social, and governance aspects of the company.
The measurement of sustainability report quality was conducted by assigning a score of 0 if an item was not presented, a score of 1 if an item was presented qualitatively, and a score of 2 if an item was presented quantitatively.
Then, the total of all disclosed scores was divided by the maximum score according to the GRI Standards 2021 (Rudyanto & Siregar, 2.
ycNycuycycayco ycycaycuycyce ycyceycyceycaycoyceycc SRQ = ycAycaycuycnycoycyco yceycuycyyceycaycyceycc ycycaycuycyce .
Shareholder pressure refers to the pressure given by shareholders to obtain accurate and transparent information about the company's condition, as a form of control over the continuity of the company's operations.
Shareholder pressure is usually proxied as share ownership Share ownership is categorized as concentrated if the majority of the company's shares are controlled by a small number of parties, so that they have significant power in influencing company decisions compared to other shareholders.
The following formula is used to measure shareholder pressure (Lulu, 2.
Shareholder Pressure = ycAycycoycayceyc ycuyce ycAycaycycuycycnycyc ycIEaycaycyceyc ycNycuycycayco yaycuycoycyycaycuyc ycIEaycaycyceyc Profitability can represent a company's profit level, the higher the growth in profitability, the better the company's future prospects (Pambudi & Meini, 2.
In this study, profitability is represented by Return on Assets (ROA) because it reflects management's ability to manage the company's assets and resources to generate profits.
The following formula is used to measure ROA (Alfaiz & Aryati, 2.
ycAyceyc ycEycycuyceycnyc ROA = ycNycuycycayco yaycycyceycyc ycu100% .
Leverage is defined as an indicator that compares the amount of liabilities with equity to measure the company's capacity to pay off financial obligations through its internal capital This ratio is used to evaluate how much debt is utilized in the composition of the company's capital structure (Nurdin & Padlah, 2.
In this research, leverage is measured using the Debt to Equity Ratio (DER).
This proxy is used as an indicator to measure leverage because this ratio describes the company's capital structure, namely the ratio between total debt and equity.
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ycu100% .
Company size is an indicator that shows the size of a business entity based on various aspects, such as total assets, total sales, and others.
In this study, company size is calculated using the natural logarithm of total assets.
This proxy is used as a measure of company size because they represent the resources owned by the company.
Company Size = Ln (Total Asset.
This study's regression model examines how shareholder pressure (TPS), profitability (ROA), leverage (DER), and company size (Ln(TA)) on sustainability report quality (SRQ).
This analysis was conducted using IBM SPSS) Statistics 27 software.
The following is the multiple linear regression equation used in this study:
SRQ = CA TPS CC ROA CE DER 4 Ln(TA) e .
RESULTS AND DISCUSSION
Table 1.
Descriptive Statistical Test Results (Before Data Transformatio.
Minimum Maximum Mean Std.
Deviation SRQ
0,12
0,57
0,294
0,121
TPS
0,30
0,99
0,638
0,200
ROA
-0,18
0,08
0,009
0,031
DER
0,04
16,08
5,274
3,166
Ln(TA) 13,49 21,41 18,449 1,766 Valid N .
Source: Research Data, 2025 Mean values of the SRQ.
TPS.
DER, and LN(T.
variables show higher values than their standard deviations, indicating that the data for these variables are distributed close to their mean value with little deviation.
Conversely, the average value of the ROA variable is below the standard deviation, indicating a high level of data variation and a distribution that tends to be uneven.
Table 2.
Descriptive Statistical Test Results (After Data Transformatio.
Minimum Maximum Mean Std.
Deviation LAG_SRQ -0,05 0,42 0,185 0,110 LAG_TPS -0,03 0,86 0,395 0,174 LAG_ROA -0,18 0,07 0,006 0,030 LAG_DER -0,08 14,14 3,277 2,559 LAG_Ln(TA) 7,23 15,02 11,533 1,485 Valid N .
Source: Research Data, 2025 After data transformation using the Cochrane-Orcutt method to address autocorrelation, the number of observations (N) became 76 from the previous 77.
Asymp.
Sig.
-taile.
Source: Research Data, 2025 Table 3.
Normality Test Results Unstandardized Residual 0,200 3533 | P a g e https://dinastipub.
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The two-tailed Asymp.
Sig.
value of 0.
200 is higher than the 0.
05 level of significance.
The test's findings show that the examined data has a normal distribution.
Model
LAG_TPS
LAG_ROA
LAG_DER
LAG_Ln(TA) Source: Research Data, 2025 Table 4.
Multicollinearity Test Results Collinearity Statistics Tolerance 0,979 0,925 0,785 0,865 VIF
1,022
1,081
1,274
1,307
Each variable has a tolerance value above 0.
10 and a Variance Inflation Factor (VIF) value below 10.
00, so it can be concluded that there is no multicollinearity problem among the independent variables used in the model.
Model
LAG_TPS
LAG_ROA
LAG_DER
LAG_Ln(TA) Source: Research Data, 2025 Table 5.
Heteroscedasticity Test Results Sig
0,654
0,974
0,269
0,400
All independent variables show significance values exceeding 0.
05, indicating that the data in this study does not suffer from heteroscedasticity.
Table 6.
Durbin-Watson Autocorrelation Test Results Adjusted Std.
Error of Model
R Square R Square the Estimate 0,672a 0,451 0,421 0,092 Source: Research Data, 2025
Durbin-Watson
1,222
The autocorrelation test yielded a Durbin-Watson (DW) value of 1.
Based on a sample size of 77 .
= .
and four independent variables .
= .
, the lower bound .
L) is 5228 and the upper bound .
U) is 1.
7407, resulting in a value of 4 Ae dU equal to 2.
Since the DW value obtained is lower than both dU and 4 Ae dU, that the model exhibits autocorrelation according to the Durbin-Watson test.
To address autocorrelation in the regression model, one approach that can be used is the Cochrane-Orcutt method (Ghozali.
Table 7.
Autocorrelation Test Results Using the Cochrane Orcutt Method Adjusted Std.
Error of Model R Square R Square the Estimate Durbin-Watson 0,650a 0,423 0,390 0,086 2,012 Source: Research Data, 2025 After adjusting the model using the Cochrane-Orcutt method, the Durbin-Watson (DW) value increased to 2.
With a final number of observations of 76 and four independent variables .
= .
, the upper limit .
U) was 1.
7339 and the lower limit .
L) was 1.
The DW value is above dU and still below the value of 4 Ae dU .
, so the data passes the autocorrelation test.
Model Table 8.
Model Feasibility Test Results (F Tes.
Sum of Square Mean Square Sig 3534 | P a g e https://dinastipub.
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0,381
0,521
0,903
0,095
0,007
12,988
0,000
Testing the model's validity produced a significance value of 0.
000, which is below the threshold of 0.
This indicates that the model used in this study is valid and can be used for further analysis.
Model 0,650a Source: Research Data, 2025 Table 9.
Results of the Determination Coefficient Test (R.
Adjusted Std.
Error of R Square R Square the Estimate Durbin-Watson
0,423
0,390
0,086
2,012
Adjusted R-square of 0.
390 indicates that 39% of the variation in sustainability report quality can be explained by the variables of shareholder pressure, profitability, leverage, and company size.
In the meantime, additional factors not covered by this research model have an impact on the remaining 61%.
(Constan.
LAG_TPS LAG_ROA LAG_DER LAG_Ln(TA) Source: Research Data, 2025 Table 10.
Multiple Linear Regression Analysis Results Unstandardized Standardized Coefficients Coefficients Std.
Error
Beta
- 0,317
0,087
-3,626
0,036
0,057
0,057
0,625
-0,030
0,335
-0,008
-0,089
0,009
0,004
0,207
2,036
0,040
0,008
0,538
5,217
Sig
0,001
0,534
0,929
0,046
0,000
The results of the first hypothesis regression analysis findings yielded a significance level 534, or more than 0.
05 and positive regression coefficient of 0.
H1 is rejected since it demonstrates that shareholder pressure has little effect on the quality of sustainability reports.
The stakeholder theory that underpinned this study is not supported by this finding because it has not been demonstrated that shareholder pressure influences businesses to raise the caliber of their sustainability reports.
According to the results of descriptive statistical analysis, which show that the average level of majority shareholding concentration in companies is relatively This means that majority shareholders do not yet have sufficient control power to exert significant pressure on management, including in the preparation of sustainability reports.
The findings of this study are consistent with the results of previous research.
Yuliandhari et al.
Wahyuningrum et al.
Lulu .
Rudyanto & Siregar .
and Kusuma & Muhyarsyah .
state that shareholder pressure does not affect the sustainability report The results of the second hypothesis regression analysis's findings yielded a significance level of 0.
929, or more than 0.
05, and a negative regression coefficient of -0.
H2 is rejected since it demonstrates that profitability has no bearing on the quality of sustainability reports.
Stakeholder theory, which holds that businesses with greater financial resources will be more socially and environmental, is not supported by the findings of this study.
Profitability is not a factor that encourages the preparation of quality sustainability reports.
Companies with high profitability ratios do not always produce better sustainability reports.
This is because the profits earned by bussines are prioritized to support the company's operational activities, so that the allocation of funds for social activities becomes limited (Rahaditama, 2.
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findings of this research corroborate those of research carried out by Gaffar et al.
and Alfaiz & Aryati .
which state that profitability does not affect the sustainability report The results of the third hypothesis regression analysis's findings yielded a significance level of 0.
046, or less than 0.
05, and a positive regression coefficient of 0.
This demonstrates that leverage improves the quality of sustainability reports, which is H3 is In line with stakeholder theory, companies with large debts have an interest in maintaining good relationships with various parties, especially creditors and regulators.
A high degree of leverage suggests that businesses are dependent on external funds, especially from creditors and fund owners or customers in the banking sector.
Companies with high leverage tend to face greater pressure from creditors and external stakeholders to demonstrate transparency and accountability.
The preparation of high-quality sustainability reports is one way to demonstrate corporate social, environmental, and governance responsibility, while also playing a role in building stakeholder confidence in the company's capacity to deal with financial risks.
The results of this study corroborate those of other studies by Saraswati et al.
Ho et al.
, and Widyawati et al.
which state that leverage has a positive effect on the sustainability report quality.
The results of the third hypothesis regression analysis's findings yielded a significance level of 0.
000, or less than 0.
05, and a positive regression coefficient of 0.
This demonstrates that the quality of sustainability reports is positively impacted by the company size, which is why H4 is accepted.
Companies are urged to create excellent sustainability reports as a social obligation, in accordance with stakeholder theory, which holds that the larger the firm, the more stakeholders it has.
Large companies tend to face greater public pressure and stricter regulations, which demand greater transparency.
In order to maintain their reputation and long-term business continuity, these companies are usually encouraged to present more informative and credible sustainability reports.
The larger the company, the greater the expectations regarding its social responsibility (Fadilla et al.
, 2.
The results of this study corroborate those of other studies by Arrokhman & Siswanto .
Barung .
Gaffar et .
, and Choirunisah et al.
which state that company size has a positive impact on the sustainability report quality.
CONCLUSION
Based on the results of the study, no significant influence of shareholder pressure or profitability on the quality of sustainability reports was found.
This indicates that stakeholder theory is not fully confirmed in the context of this study, as neither variable showed a significant contribution to corporate sustainability disclosure.
This means that pressure from shareholders and profitability are not factors that encourage companies to produce better sustainability report.
Leverage and company size have a positive effect on the sustainability report quality, which means that the results support stakeholder theory.
Companies with high leverage levels trigger the need to maintain market confidence, including in terms of Large companies have more stakeholders and are subject to stricter public and regulatory scrutiny, so they will strive to produce high-quality sustainability reports.
Future researchers may re-examine the variables of shareholder pressure and profitability, which were not significant in this study.
Profitability can be measured using other proxies such as Return on Equity (ROE) or Net Profit Margin (NPM) to obtain more comprehensive results.
To see the long-term development of sustainability report quality from year to year, future researchers may extend the research period.
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REFERENCES