Sustainability Disclosures and Financial Performance of Islamic Banks in Indonesia
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Published:
Dec 27, 2023
Keywords:
Financial performance, Islamic bank, sustainability, sustainability disclosure
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Abstract
Sustainability practices and disclosures of Islamic banking in Indonesia are still very low. Currently, the disclosure of sustainability reports has been required by the Financial Services Authority (OJK). This paper measures the level of sustainability disclosures (economic, social, and environmental) based on OJK Regulation No. 51/2017 and investigates its impact on the financial performance of Islamic banks in Indonesia. The study was conducted in Islamic banks during 2018-2020 with a total sample of 12 banks obtained through purposive sampling. The results show that there is no significant effect of the sustainability disclosure dimensions on ROA. On the other hand, there is a significant effect of the sustainability disclosure dimensions on ROE and EPS. These results encourage Islamic banks to consistently issue a sustainability report. In the long term, the sustainability disclosure is expected to have a positive impact on the growth of Islamic banks in Indonesia.
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References
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Dewi, I. A. P. P. P., Putra, I. P. M. J. S., & Endina, I. D. M. (2019). Pengaruh sustainability report terhadap kinerja keuangan perusahaan dan kinerja pasar pada perusahaan yang terdaftar di Bursa Efek Indonesia. Kumpulan Hasil Riset Mahasiswa Akuntansi (KHARISMA), 1(1), 263–275.
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Lestari, M. L. & Suardana, K. A. (2019). Pengaruh intensitas pengungkapan dimensi sustainability reporting terhadap reaksi pasar perusahaan BUMN yang terdaftar di BEI. E-Jurnal Akuntansi Universitas Udayana, 27(2), 954-983. https://doi.org/10.24843/EJA.2019.v27.i02.p05.
Makori, D. M. & Jagongo, A. (2013). Environmental accounting and firm profitability: An empirical analysis of selected firms listed in Bombay stock exchange, India. International Journal of Humanities and Social Science, 3(18), 248–256.
Mallin, C., Farag, H., & Ow-Yong, K. (2014). Corporate social responsibility and financial performance in Islamic banks. Journal of Economic Behavior and Organization. https://doi.org/10.1016/j.jebo.2014.03.001.
Melati, P. M. & Suryowati, K. (2018). Aplikasi metode common effect, fixed fffect, dan random effect untuk menganalisis faktor-faktor yang mempengaruhi tingkat kemiskinan kabupaten di Jawa Tengah dan Daerah Istimewa Yogyakarta. Jurnal Statistika Industri dan Komputasi, 3(1), 41–51.
Meutia, I., & Febrianti, D. (2017). Islamic social reporting in Islamic banking: Stakeholders theory perspective. In SHS Web of conferences (Vol. 34, p. 12001). EDP Sciences.
Nofianto, E. & Agustina, L. (2014). Analisis pengaruh sustainability report terhadap kinerja keuangan perusahaan. Accounting Analysis Journal, 3(3), 343–351.
Nugroho, P. I. & Arjowo, I. S. (2014). The effects of sustainability report disclosure towards financial performance. International Journal of Business and Management Studies, 3(3), 225–239.
[OJK] Otoritas Jasa Keuangan. (2021). Laporan Perkembangan Keuangan Syariah Indonesia 2020 [online]. [accessed 2023 Mar 27]. Retrieved from: https://ojk.go.id/id/kanal/syariah/data-dan-statistik/laporan-perkembangan-keuangan-syariah-indonesia/Pages/Laporan-Perkembangan-Keuangan-Syariah-Indonesia-2020.aspx.
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Rahmananda, Z. & Gustyana, T. T. (2019). Pengaruh sustainability report terhadap kinerja keuangan return on equity (roe) pada perusahaan yang terdaftar di LQ45 pada periode 2013-2016. Jurnal Mitra Manajemen, 3(12), 1128–1140. https://doi.org/10.52160/ejmm.v3i12.306.
Rizki, M. K., Agriyanto, R., & Farida, D. N. (2019). The effect of sustainability report and profitability on company value: evidence from Indonesian sharia shares. Economica: Jurnal Ekonomi Islam, 10(1), 117–140. https://doi.org/10.21580/economica.2019.10.1.3747.
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Ross, S. A. (1977). Determination of financial structure: The Incentive-signalling approach. The Bell Journal of Economics, 8(1), 23–40. https://doi.org/https://doi.org/10.2307/3003485.
Sabrina & Lukman, H. (2019). Pengaruh sustainability report terhadap kinerja keuangan perusahaan perbankan. Jurnal Multiparadigma Akuntansi, 1(2), 477–486.
Sakiyah, D. E., Salim, M. A., & Priyono, A. A. (2020). Pengaruh pengungkapan sustainability report terhadap kinerja keuangan pada perusahaan perbankan yang terdaftar di BEI 2016-2018. E-Jurnal Riset Manajemen, 9(10), 68–85.
Sejati, B. P. & Prastiwi, A. (2015). Pengaruh pengungkapan sustainability report terhadap kinerja dan nilai perusahaan. Diponegoro Journal of Accounting, 4(1), 1–12.
Setiyowati, P. & Gunarsih, T. (2020). Apakah sustainabiity reporting meningkatkan kinerja? (studi pada perusahaan publik di B.E.I. periode 2014-2017). Paper presented at Seminar Nasional dan Call for Paper Paradigma Pengembangan Ekonomi Kreatif di Era 4.0.
Shodiq, M. J. (2021). The influence of sustainability report on islamic banking performance in Indonesia. In Complex, Intelligent and Software Intensive Systems: Proceedings of the 15th International Conference on Complex, Intelligent and Software Intensive Systems (CISIS-2021) (pp. 590-597). Springer International Publishing.
Srihardianti, M., Mustafid, & Prahutama, A. (2016). Metode regresi data panel untuk peramalan konsumsi energi di Indonesia. 5(3), 475–485.
Suchman, M. C. (1995). Managing legitimacy: strategic and institutional approaches. Academy of Management Review, 20(3), 571–610.
Susanto, Y. K. & Tarigan, J. (2013). Pengaruh Pengungkapan Sustainability Report terhadap Profitabilitas Perusahaan. Business Accounting Review, 1, 1–12.
Tarigan, J. & Semuel, H. (2014). Pengungkapan sustainability report dan kinerja keuangan. Jurnal Akuntansi dan Keuangan, 16(2), 88–101. https://doi.org/10.9744/jak.16.2.88-101.
Zyadat, A. A. H. (2017). The impact of sustainability on the financial performance of Jordanian Islamic banks. International Journal of Economics and Finance, 9(1), 55–63. https://doi.org/10.5539/ijef.v9n1p55.
Ameer, R., & Othman, R. (2012). Sustainability practices and corporate financial performance: a study based on the top global corporations. Journal of Business Ethics, 108(1), 61–79. https://doi.org/10.1007/s10551-011-1063-y.
Anita, A., & Yulianto, A. (2016). Pengaruh kepemilikan manajerial dan kebijakan dividen terhadap nilai perusahaan. Management Analysis Journal, 5(1), 17–23.
Bae, S. M., Masud, M. A. K., & Kim, J. D. (2018). A cross-country investigation of corporate governance and corporate sustainability disclosure: a signaling theory perspective. Sustainability, 10(8), 1–16. https://doi.org/doi:10.3390/su10082611.
Bukhori, M. R. T. & Sopian, D. (2017). Sistem informasi, keuangan, auditing dan perpajakan. SIKAP, 2(1), 35–48.
Burhan, A. H. N. & Rahmanti, W. (2012). the Impact of Sustainability Reporting on Company Performance. Journal of Economics, Business, and Accountancy Ventura, 15(2), 257–272. https://doi.org/10.14414/jebav.v15i2.79.
Burlea, A. S. & Popa, I. (2013). Legitimacy theory. Encyclopedia of Corporate Social Responsibility, 21, 1579-1584.
Cheng, B., Ioannou, I., & Serafeim, G. (2014). Corporate social responsibilities and access to finance. Strategic Management Journal, 35(1), 1-23.
Dewi, I. A. P. P. P., Putra, I. P. M. J. S., & Endina, I. D. M. (2019). Pengaruh sustainability report terhadap kinerja keuangan perusahaan dan kinerja pasar pada perusahaan yang terdaftar di Bursa Efek Indonesia. Kumpulan Hasil Riset Mahasiswa Akuntansi (KHARISMA), 1(1), 263–275.
Dian, A. S. (2018). The effect of sustainability report disclosure on financial performance. Russian Journal of Agricultural and Socio-Economic Sciences, 9(81), 185–192. https://doi.org/https://doi.org/10.18551/rjoas.2018-09.21.
Dibia, N. O. & Nwaigwe, N. G. (2017). Corporate sustainability reporting and firm profitability: a survey of selected quoted companies in Nigeria. Journal of Finance, Banking and Investment, 4(2), 136–147.
Djajadikerta, H. G. & Trireksani, T. (2012). Corporate social and environmental disclosure by Indonesian listed companies on their corporate web sites. Journal of Applied Accounting Research, 13(1), 21–36. https://doi.org/10.1108/09675421211231899.
Elkington, J. (1997). Cannibals with Forks. Chichester (UK), Capstone Publishing Limited.
Freeman, E. R. (2015). Stakeholder Management: Framework and Philosophy. In Strategic Management: A Stakeholder Approach (pp. 52–82). Cambridge (UK), Cambridge University Press.
Greene, W. H. (2002). Econometric Analysis (5th Edition). Hoboken (US), Pearson Education Inc.
Gujarati, D. N. (2003). Basic Econometrics (Fourth Edition). New York (US), McGraw-Hill Companies.
Gujarati, D. N. & Porter, D. C. (2009). Basic Econometrics. In Introductory Econometrics: A Practical Approach (Fifth Edition). New York (US), The McGraw-Hill Companies.
Hastuti, T. D. (2005, Septemner). Hubungan antara good corporate governance dan struktur kepemilikan dengan kinerja keuangan (studi kasus pada perusahaan yang listing di bursa efek Jakarta). In Simposium Nasional Akutansi VIII (pp. 15–16).
Hörisch, J., Freeman, R. E., & Schaltegger, S. (2014). Applying stakeholder theory in sustainability management: Links, similarities, dissimilarities, and a conceptual framework. Organization and Environment, 27(4), 1–19. https://doi.org/10.1177/1086026614535786.
Islam, R. Md., Rahman, T., Choudhury, T., & Adnan, A.M. (2014). How earning per share (EPS) affects on share price and firm value. European Journal of Business and Management, 6(17), 97–106.
Jan, A., Marimuthu, M., Isa, M. P. B. M. M., & Albinson, P. A. (2018). Sustainability practices and banks financial performance: A conceptual review from the islamic banking industry in Malaysia. International Journal of Business and Management, 13(11), 61–88. https://doi.org/10.5539/ijbm.v13n11p61.
Johari, J. & Komathy. (2019). Sustainability reporting and firm performance: Evidence in Malaysia. International Journal of Accounting, Finance and Business (IJAFB), 4(17), 32–45.
KPMG. (2017). The Road Ahead: The KPMG Survey of Corporate Responsibility Reporting 2017 [online]. [accessed 2023 May 27]. Retrieved from: https://assets.kpmg.com/content/dam/kpmg/be/pdf/2017/kpmg-survey-of-corporate-responsibility-reporting-2017.pdf.
Kurniawan, T., Sofyani, H., & Rahmawati, E. (2018). Pengungkapan sustainability report dan nilai perusahan: Studi empiris di Indonesia dan Singapura. Kompartemen: Jurnal Ilmiah Akuntansi, 16(1), 1–20. https://doi.org/10.30595/kompartemen.v16i1.2100.
Lestari, A. & Setyawan, Y. (2017). Analisis regresi data panel untuk mengetahui faktor yang mempengaruhi belanja Daerah di Provinsi Jawa Tengah. Jurnal Statistika Industri dan Komputasi, 2(1), 1–11.
Lestari, M. L. & Suardana, K. A. (2019). Pengaruh intensitas pengungkapan dimensi sustainability reporting terhadap reaksi pasar perusahaan BUMN yang terdaftar di BEI. E-Jurnal Akuntansi Universitas Udayana, 27(2), 954-983. https://doi.org/10.24843/EJA.2019.v27.i02.p05.
Makori, D. M. & Jagongo, A. (2013). Environmental accounting and firm profitability: An empirical analysis of selected firms listed in Bombay stock exchange, India. International Journal of Humanities and Social Science, 3(18), 248–256.
Mallin, C., Farag, H., & Ow-Yong, K. (2014). Corporate social responsibility and financial performance in Islamic banks. Journal of Economic Behavior and Organization. https://doi.org/10.1016/j.jebo.2014.03.001.
Melati, P. M. & Suryowati, K. (2018). Aplikasi metode common effect, fixed fffect, dan random effect untuk menganalisis faktor-faktor yang mempengaruhi tingkat kemiskinan kabupaten di Jawa Tengah dan Daerah Istimewa Yogyakarta. Jurnal Statistika Industri dan Komputasi, 3(1), 41–51.
Meutia, I., & Febrianti, D. (2017). Islamic social reporting in Islamic banking: Stakeholders theory perspective. In SHS Web of conferences (Vol. 34, p. 12001). EDP Sciences.
Nofianto, E. & Agustina, L. (2014). Analisis pengaruh sustainability report terhadap kinerja keuangan perusahaan. Accounting Analysis Journal, 3(3), 343–351.
Nugroho, P. I. & Arjowo, I. S. (2014). The effects of sustainability report disclosure towards financial performance. International Journal of Business and Management Studies, 3(3), 225–239.
[OJK] Otoritas Jasa Keuangan. (2021). Laporan Perkembangan Keuangan Syariah Indonesia 2020 [online]. [accessed 2023 Mar 27]. Retrieved from: https://ojk.go.id/id/kanal/syariah/data-dan-statistik/laporan-perkembangan-keuangan-syariah-indonesia/Pages/Laporan-Perkembangan-Keuangan-Syariah-Indonesia-2020.aspx.
Prayoga, A. & Siswantoro, D. (2021, January). Sustainability practices and financial performance: evidence from Islamic Banking in Indonesia. In Proceedings of the 1st International Conference on Economics Engineering and Social Science, InCEESS 2020, 17-18 July, Bekasi, Indonesia.
Rahmananda, Z. & Gustyana, T. T. (2019). Pengaruh sustainability report terhadap kinerja keuangan return on equity (roe) pada perusahaan yang terdaftar di LQ45 pada periode 2013-2016. Jurnal Mitra Manajemen, 3(12), 1128–1140. https://doi.org/10.52160/ejmm.v3i12.306.
Rizki, M. K., Agriyanto, R., & Farida, D. N. (2019). The effect of sustainability report and profitability on company value: evidence from Indonesian sharia shares. Economica: Jurnal Ekonomi Islam, 10(1), 117–140. https://doi.org/10.21580/economica.2019.10.1.3747.
Rohmah, K. L., Adiputra, A. K., & Kurniawati, W. (2019, November). Pengaruh pengungkapan sustainability report terhadap kinerja keuangan perusahaan. Paper presented at Seminar Nasional UNRIYO.
Rosikah, Prananingrum, D. K., Muthalib, D. A., Irfandy, M. A., & Rohansyah, M. (2018). Effects of return on asset, return on equity, earning per share on corporate value. The International Journal of Engineering and Science, 7(3), 6–14.
Ross, S. A. (1977). Determination of financial structure: The Incentive-signalling approach. The Bell Journal of Economics, 8(1), 23–40. https://doi.org/https://doi.org/10.2307/3003485.
Sabrina & Lukman, H. (2019). Pengaruh sustainability report terhadap kinerja keuangan perusahaan perbankan. Jurnal Multiparadigma Akuntansi, 1(2), 477–486.
Sakiyah, D. E., Salim, M. A., & Priyono, A. A. (2020). Pengaruh pengungkapan sustainability report terhadap kinerja keuangan pada perusahaan perbankan yang terdaftar di BEI 2016-2018. E-Jurnal Riset Manajemen, 9(10), 68–85.
Sejati, B. P. & Prastiwi, A. (2015). Pengaruh pengungkapan sustainability report terhadap kinerja dan nilai perusahaan. Diponegoro Journal of Accounting, 4(1), 1–12.
Setiyowati, P. & Gunarsih, T. (2020). Apakah sustainabiity reporting meningkatkan kinerja? (studi pada perusahaan publik di B.E.I. periode 2014-2017). Paper presented at Seminar Nasional dan Call for Paper Paradigma Pengembangan Ekonomi Kreatif di Era 4.0.
Shodiq, M. J. (2021). The influence of sustainability report on islamic banking performance in Indonesia. In Complex, Intelligent and Software Intensive Systems: Proceedings of the 15th International Conference on Complex, Intelligent and Software Intensive Systems (CISIS-2021) (pp. 590-597). Springer International Publishing.
Srihardianti, M., Mustafid, & Prahutama, A. (2016). Metode regresi data panel untuk peramalan konsumsi energi di Indonesia. 5(3), 475–485.
Suchman, M. C. (1995). Managing legitimacy: strategic and institutional approaches. Academy of Management Review, 20(3), 571–610.
Susanto, Y. K. & Tarigan, J. (2013). Pengaruh Pengungkapan Sustainability Report terhadap Profitabilitas Perusahaan. Business Accounting Review, 1, 1–12.
Tarigan, J. & Semuel, H. (2014). Pengungkapan sustainability report dan kinerja keuangan. Jurnal Akuntansi dan Keuangan, 16(2), 88–101. https://doi.org/10.9744/jak.16.2.88-101.
Zyadat, A. A. H. (2017). The impact of sustainability on the financial performance of Jordanian Islamic banks. International Journal of Economics and Finance, 9(1), 55–63. https://doi.org/10.5539/ijef.v9n1p55.