The Effect of Sustainability Report on Financial Performance with Good Corporate Governance Quality as a Moderating Variable

Abstract

Financial performance is an important issue for company. Currently, one of method that can be used to improve financial performance is disclose sustainability report. Sustainability report is a report containing non-financial information that consists economic, social and environment performance. Sustainable companies is a company that not only pay attention to the benefits, but also aware about environment and social around their company. To create effective and efficient sustainability report, require a good corporate governance. This study analyzes the effect of sustainability report on financial performance by observe at each aspect of the sustainability report and to analyze how good corporate governance quality can moderate that effect. This study use financial company who publish sustainability report on 2013-2016 and participated  in Corporate Governance Perception Index (CGPI) as a sample. The method used to analyse the effect between variables is Moderated Regression Analysis. The results of this study indicate that social and environment performance disclosure has positif significant effect on financial performance, but economic performance disclosure has negative significant effect on financial performance. Good corporate governance quality weakens the effect of economic and environment performance disclosure on financial performance. But good corporate governance quality is not able to moderate the effect of social performance disclosure on financial performance