Sustainability report quality with moderating impact of carbon emissions index: evidence from ASEAN region

What the paper says

Purpose This study aims to examine the nexus between sustainability report quality and several antecedent components (i.e. sector, country and company size) in the context of Southeast Asian countries as an emerging market. Besides, the authors consider carbon emissions as a moderating variable for the link between sector and sustainability report quality. Design/methodology/approach Data from 5,410 listed companies in six countries of the ASEAN region (i.e. Indonesia, Malaysia, Singapore, the Philippines, Thailand and Vietnam) were downloaded from the Thomson Reuters Eikon Datastream. The authors finally used data from 538 companies with 2,690 observations during the period 2019–2023 to test the study model effectively. Findings By using the ordinary least squares, fixed-effects model and random-effects model, the findings indicate that the antecedent components (i.e. sector, country and company size) have a favorable effect on sustainability report quality. Moreover, carbon emissions demonstrate a significant moderating role in the relationship between sector and sustainability report quality. Practical implications Investors can use the findings to assess companies’ environmental performance and make informed decisions. Businesses, particularly those operating in high-emission sectors, can leverage this knowledge to improve their sustainability reporting practices, enhance transparency and attract responsible investments. The insights from this study can contribute to Southeast Asian countries’ sustainable development goals by promoting corporate accountability and responsible business practices. Social implications This study underscores the critical role of sustainability reporting in fostering corporate transparency and accountability across Southeast Asian countries. By highlighting the impact of sector, country and company size on sustainability report quality, along with the moderating role of carbon emissions, the research provides valuable insights into improving environmental performance. These findings can guide companies, particularly those in high-emission industries, to adopt better sustainability practices, enhance trust among stakeholders and contribute to mitigating climate change. Moreover, the study empowers policymakers and investors to promote responsible business practices and socially conscious investments, aligning corporate behavior with the region’s sustainable development goals. Originality/value By analyzing the relationship between sustainability report quality and antecedent factors like sector, country and company size, the findings provide valuable insights for policymakers, investors and businesses. Understanding how carbon emissions moderate the link between sustainability reporting and sector can guide targeted regulations and incentives, fostering a more sustainable business ecosystem.