The Effect of Leverage and Good Corporate Governance on Sustainability Report Disclosure

Abstract

This study aims to analyze the influence of leverage and good corporate governance on sustainability report disclosure among state-owned enterprises during the 2016–2020 period. The study uses a quantitative approach with a sample of 77 observations selected through purposive sampling. Data analysis is conducted using multiple linear regression. The dependent variable is sustainability report disclosure, measured based on the Global Reporting Initiative (GRI) Standards issued by the Global Sustainability Standards Board (GSSB). The independent variables include leverage and good corporate governance, while company size is used as a control variable. The findings indicate that the Debt to Asset Ratio has a negative effect on sustainability report disclosure. Meanwhile, the Debt to Equity Ratio, the number of commissioners, and company size do not significantly influence sustainability report disclosure. On the other hand, the proportion of independent commissioners and the number of audit committee members have a positive and significant effect on sustainability report disclosure. These results suggest that stronger corporate governance mechanisms, particularly independent oversight and effective audit committees, contribute to improving the transparency and comprehensiveness of sustainability reporting.