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Investment efficiency and environmental, social, and governance reporting: Perspective from corporate integration management

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  • Iman Harymawan
  • Mohammad Nasih
  • Dian Agustia
  • Fajar Kristanto Gautama Putra
  • Hadrian Geri Djajadikerta

Abstract

This article examines the relationship between investment efficiency (INVEFF) and environmental, social, and governance (ESG) reporting. We posit corporate integration management (CIM), which is reflected by the level of INVEFF, is a crucial driver for the better quality of ESG reporting. But there is a second possibility which ESG reporting is viewed as a different firm's burden, and therefore, it is a form of inefficiency. We test our hypothesis in Indonesia's unique setting of nonfinancial listed firms from 2010 to 2018. We find that INVEFF is confirmed as one of the critical drivers for enhancing ESG reporting quality. Our result is consistent during several robustness checks. Furthermore, we document that a positive relationship between INVEFF and ESG reporting is not incurred in all circumstances. Our study is one of few studies that focus on quantitative measurement of CIM and examines its relationship with ESG reporting.

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  • Iman Harymawan & Mohammad Nasih & Dian Agustia & Fajar Kristanto Gautama Putra & Hadrian Geri Djajadikerta, 2022. "Investment efficiency and environmental, social, and governance reporting: Perspective from corporate integration management," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1186-1202, September.
    • Handle: RePEc:wly:corsem:v:29:y:2022:i:5:p:1186-1202
    DOI: 10.1002/csr.2263
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