Globalization has affected the business world. Since then, sustainability has become one of the most important aspects in business. Moreover, investors are also starting to care about sustainable business involvement. In line with this, there is ESG (economic, social, and governance) as the benchmark for the globalization value on sustainability. Globalization has impacted Indonesia. It is also very concerning to see that only 70 of the 400 firms that are registered on the Indonesian stock exchange produced sustainability reporting in 2016. Only 30% of the biggest publicly listed companies have turned in their sustainability reports, measured by market value. Since then, the government released the regulations that stated the mandatory sustainability reporting in 2017 under the financial services authority regulation number 51/POJK.03/2017 and implemented the SRI. However, the rgulations that are released in 2017 will be effective in 2020.
The issue is very important and the author would like to gather information to give better information regarding this matter. The research will use quantitative methods and do data collection through: IDX statistics 2020, annual report 2020, listed sustainability report before 2020 (company's website), SRI KEHATI index 2020. The research background takes place in 2020 due to the mandatory regulations of sustainability reporting just effectively in 2020.
From all the data that are collected, the author will use T-Testing and multiple linear regression analysis to find the effect of two or more independent variables (independent variable or X) on the dependent variable (dependent variable Y). Based on the analysis, the result shows negative results between the X and Y variables. Moreover, the result is insignificant which shows that the data collected failed to prove the relationship between X and Y, and it does not mean that X did not affect Y, but that the sample data failed to prove this relationship. Additionally, it has been shown that even though the company has submitted the SRI-Kehati it has a negative effect on the company performance which shows that the sustainability report might not be one of the aspects that the investor considers to invest their money in the company.