The Effect of Sustainability Reporting on Firm Value with Institutional Ownership as a Moderating Variable: Evidence from Consumer Non-Cyclicals Companies Listed on the Indonesia Stock Exchange (2019-2023)

Abstract

Environmental, social, and economic disclosures represent a critical form of corporate transparency in communicating sustainability-related information that may heavily influence investors’ assessments of firm value in contemporary capital markets. This study aims to comprehensively examine the direct effect of sustainability reporting disclosure on firm value and investigate the moderating role of institutional ownership in this relationship. A quantitative research approach was employed using secondary data extracted from 37 consumer non-cyclical sector companies listed on the Indonesia Stock Exchange (IDX) during the 2019-2023 period. The empirical findings reveal that sustainability reporting disclosure has a negative and statistically significant effect on firm value. The results also indicate that the relatively low level of institutional ownership observed in the sample has not yet functioned as an effective external monitoring mechanism capable of strengthening the value relevance or credibility of sustainability reporting in the eyes of the market.