THE EFFECT OF SUSTAINABILITY REPORT DISCLOSURE AND SUSTAINABILITY REPORT ASSURANCE ON FIRM VALUE: EVIDENCE FROM INDONESIAN FAST-MOVING CONSUMER GOODS (FMCG) COMPANIES DURING THE 2019–2024 PERIOD

Abstract

This study examines the influence of sustainability report disclosure and sustainability report assurance on firm value in Indonesia’s fast-moving consumer goods (FMCG) sector. Although sustainability reporting has increasingly become a regulatory mandate, evidence regarding its economic relevance in emerging markets remains mixed. Using panel data consisting of 174 firm-year observations from FMCG companies over the 2019–2024 period, this research applies panel regression analysis to evaluate whether sustainability disclosure and the provision of external assurance contribute to higher firm value, measured by price-to-book value (PBV). The Fixed Effects Model was selected based on panel model specification tests. The results show that sustainability report disclosure has a positive and significant effect on firm value, indicating that investors in the Indonesian market have begun to incorporate ESG-related information into pricing decisions, although its contribution remains relatively limited. In contrast, sustainability report assurance does not have a significant effect on firm value, despite showing a negative coefficient. This finding suggests that ESG-related disclosure may have begun to be reflected in investors’ valuation decisions and its role in strengthening the credibility of sustainability information remains limited. The study contributes to the literature by demonstrating that the value relevance of sustainability reporting is beginning to emerge, while the effectiveness of sustainability assurance remains context-dependent, particularly in emerging markets where ESG maturity and investor awareness are still developing.