Bi-directional in sustainability reporting and profitability: A study in Indonesian banks and non-banks

Tri Gunarsih, Setiyono Setiyono, Fran Sayekti, Tamas Novak


We investigate the sustainability reporting differences in banks and non-banks sample firms and investigates reserve causality between sustainability reporting and profitability. The independent-sample t-test implemented to analyze the differences. The results report evidence that there are differences in sustainability reporting between the banks and non-bank. The average score of the sustainability reporting index in banks is higher than non-bank. The multiple regressions implemented in reserve causality between sustainability reporting and profitability. The empirical evidence shows that there is a negative relationship between sustainability reporting and profitability. We suggest that sustainability is merely a cost. The bi-directional relationship emerges in the economic and social dimension of sustainability reporting index. This result indicates that sustainability reporting influences firm performance and vice versa.

JEL Classification: G21, G30



Profitability; Reserve causality; Sustainability reporting


Amacha, E. B., & Dastane, O. (2017). Sustainability practices as determinants of financial performance: A case of Malaysian corporations. Journal of Asian Finance, Economics and Business, 4(2), 55-68.

Bartlett, B. D. (2012). The effect of corporate sustainability reporting on firm valuation. CMC Senior Theses. Paper 489.

Diantimala, Y. (2018). The mediating effect of sustainability disclosure on the relationship between financial performance and firm value. Journal of Accounting, Finance and Auditing Studies, 4(2), 32-48.

Fodio, M. I., Abu-Abdissamad, A. M., & Oba, V. C. (2013). Corporate social responsibility and firm value in quoted Nigerian financial services. International Journal of Finance and Accounting, 2(7), 331-340.

Gaspar, R. (2013). Sustainability and financial performance: The chicken-egg dilemma. X&Y Partners.

Gunarsih, T., Transistari, R., & Rudatin, A. (2019) Is GCG strengthening the relationship between sustainability reporting and performance? A study in IDX listed company, Working Paper.

Gunarsih, T., Setiyono, Sayekti, H., & Novak, T. (2018) Good corporate governance: Firm performance and ownership causality test. Jurnal Keuangan dan Perbankan 22(4): 670–679.

Gunarsih, T., & Ismawati, Y. (2018). Sustainability report and firm performance: Study in mining and metal and food processing industry Indonesia Stock Exchange 2014-2017. Journal of Governance and Integrity, 2(1), 9-26.

Haryono, U., Iskandar, R., Paminto, A., & Ulfah, Y. (2016). Sustainability performance: It’s impact on risk and value of the firm. Corporate Ownership & Control, 14(1), 278-286.

Hair, Jr., Joseph, F., Black, W. C., Babin, B. J., & Anderson, R. E. (2014). Multivariate Data Analysis. Seventh Edition. United States of America: Pearson Education Limited.

Karagiorgos, T. 2010. Corporate social responsibility and financial performance: An empirical analysis on Greek companies. European Research Studies, XIII(4), 85-108.

Kusuma, A. P. A., & Koesrindartoto, D. P. (2014). Sustainability practices and financial performance: An empirical evidence from Indonesia. International Conference on Trends in Economics, Humanities and Management (ICTEHM'14) Aug 13-14, (Thailand).

Nnamani, J. N., Onyekwelu, U. J., & Kevin, U. O. (2017). Effect of sustainability accounting and reporting on financial performance of firms in Nigeria brewery sector. European Journal of Business and Innovation Research, 5(1), 1-15.

Sejati, B. P., & Prastiwi, A. (2015). Pengaruh pengungkapan sustainability report terhadap kinerja dan nilai perusahaan. Diponegoro Journal of Accounting, 4(1), 1-12.

Utami, W. (2015). Financial performance and the quality of sustainability disclosure based on global reporting initiative: Value relevances study in Indonesia Stock Exchange. Mediterranean Journal of Social Sciences, 6(5), 243-248.

Uwuigbe, U., Teddy, O., Uwuigbe, O. R., Emmanuel, O., Asiriuwa, O., Eyitomi, G. A., & Taiwo, O. S. (2018). Sustainability reporting and firm performance: A bi-directional approach. Academy of Strategic Management Journal, 17(3), 6-16.

Weber, O. (2017). Corporate sustainability and financial performance of Chinese banks. Sustainability Accounting, Management and Policy Journal, 8(3), 358-385.

Whetman, L. L. (2017). The impact of sustainability reporting on firm profitability. Undergraduate Economic Review, 14(1).

Xie, S. (2015). Corporate social responsibility and firm performance: OLS and Granger Causality Analysis.

Full Text: PDF


  • There are currently no refbacks.

rsz_8th_ifma rsz_6th_perbanas_conference rsz_the_6th_indonesian_finance_association_international_conference

Journal of Finance and Banking

Diploma Program of Banking and Finance
Faculty of Economics and Business University of Merdeka Malang

Mailing Address:

2nd-floor Banking and  Finance Building, Terusan Raya Dieng Street No.57 Malang, 65146, East Java, Indonesia
Phone/WhatsApp: +628123321664; Fax. +62 341 580511

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