Sustainability Reporting And Corporate Performance: How Green Image Building Bridges The Gap?

Abstract

Sustainability reporting has become a critical topic in the modern business world as it plays a vital role in enhancing corporate transparency and social responsibility. However, there remains uncertainty regarding how sustainability reporting practices can effectively improve corporate performance, particularly through the development of a green image. This study aims to examine the influence of sustainability reporting on corporate performance, mediated by green image building, and moderated by sustainability-oriented innovation and competitive maneuverability. Employing a quantitative approach with a cross-sectional survey design, data were analyzed using Structural Equation Modeling (SEM). The sample consisted of 150 respondents from executives in the mining, palm oil, and tobacco sectors in Indonesia. The results demonstrate that sustainability reporting has a significant positive effect on green image building, which in turn enhances competitive maneuverability and corporate performance. Furthermore, sustainability-oriented innovation and competitive maneuverability strengthen these relationships. These findings confirm that green image building acts as a strategic mechanism linking sustainability practices to corporate performance outcomes. In conclusion, companies need to manage sustainability reporting transparently and develop sustainable innovations to reinforce their green image, thereby improving organizational agility and overall business performance. The practical implications offer guidance for management to integrate sustainability into corporate strategy to achieve competitive advantage.