SUSTAINABILITY REPORTING AND BANK PERFORMANCE EVIDENCE FROM ASEAN-5 COUNTRIES

Abstract

The objective of the study to identify the relationship of sustainability reporting between banking performance in ASEAN-5 countries. This study used Panel data Fixed affect to test the hypotheses. The study used secondary data, extracted from annual report and sustainability report of the studied companies. The sample contained 46 banks and 356 observation from five countries in Southeast Asia: Indonesia, Singapore, Malaysia, Thailand, and Philippines for 7 years (2014-2021). The dependent variables are return on assets (ROA), return on equity (ROE) and Tobin’s Q. The independent variable is environmental, social and governance (ESG) reporting. The results of the study show that there is a relationship between sustainability reporting and company performance. Sustainability reporting has a positive and significant relationship to company performance in this case ROA, ROE, and Tobins'Q. This supports the signaling theory, where company performance will be better if the company discloses social responsibility information that is more specific and can be observed more broadly, because it can provide the best signal to stakeholders which ultimately has an impact on company performance.