The Influence of Board of Commissioners’ Compensation, Human Capital, and Green Innovation on Sustainability Reporting Ratings: Evidence from Indonesia
DOI:
https://doi.org/10.15575/jieb.v6i1.53899Keywords:
ASRRAT, Corporate Governance, Environmental Innovation, Organizational Capabilities, Sustainability Reporting QualityAbstract
Sustainability reporting has become an important mechanism for demonstrating corporate accountability and transparency. However, maintaining high sustainability reporting ratings requires more than formal compliance and may depend on governance incentives, organizational capabilities, and substantive environmental initiatives. This study examines the influence of board compensation, human capital, and green innovation on sustainability reporting ratings among companies participating in the Asia Sustainability Reporting Rating (ASRRAT) in Indonesia. Using a quantitative approach, this study analyzes 69 firm-year observations from 23 companies that consistently participated in ASRRAT during 2021–2023. Data were obtained from annual reports and sustainability reports and analyzed using ordinal logistic regression. The results show that board compensation has a positive and significant effect on ASRRAT ratings. Human capital also has a positive and significant effect, while green innovation demonstrates a positive and significant effect. These findings indicate that stronger governance incentives, greater investment in human capital, and substantive green innovation are associated with a higher likelihood of achieving superior sustainability reporting ratings. The study contributes to the sustainability reporting literature by integrating governance incentives, organizational capabilities, and green innovation within a single empirical framework. The findings suggest that companies can strengthen sustainability reporting performance by aligning board incentives with responsible oversight, developing human capital capabilities, and implementing measurable environmental innovations.
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