The Effect of Sustainability Practices based on Sustainable Development Goals

(SDGs) to Firm Performance and Moderation Effect of Independent

Assurance
Fadilla Primaria Dewi1, Ratna Wardhani2
1,2
Accounting Department, Faculty of Economic and Business, Universitas Indonesia
E-mail: fadilla.primaria@ui.ac.id, ratnawardhani@yahoo.com

Abstract
The purpose of this research is to analyze the influence of company sustainability practices based on Sustainable
Development Goals (SDGs) on the company's financial performance and market performance and see the impact of
assurance on company performance. This research is limited to public companies in Indonesia, Malaysia, Singapore,
Philippines and Thailand engaged in the non-financial sector and listed on the capital markets of each country in
2016. Independent variables in this study is the level of corporate sustainability practices according to SDGs.
Measurement of financial performance using ROA and ROE, while measuring the market performance of companies
using Tobin's Q and MBV. The results of this study prove that the company's sustainability practices have a significant
positive effect on financial performance and market performance of the company. Furthermore, the study also found
that the company's decision to use assurance services in its sustainability practices weakened the impact of
sustainability practices on financial performance, while this research also found no significant effect on the use of
independent assurance services on the firm's sustainable practices relation to firm value.
Keyword: sustainability practices, SDGs, financial performance, market performance, assurance

INTRODUCTION
The world's attention to the environment is fueled by the emergence of a trade-off concept
between Economic Development and Environmental Sustainability that was initiated at the 1987
United Nations General Conference of Our Common Future. The development of world attention
and the anticipation of environmental destruction due to industrialization led to the emergence of
strategic policies that could undertake economic development without sacrificing the environment
called the concept of sustainability (Bruntland Commission, 1987). One of the initiatives
undertaken by the United Nations was marked by the birth of a common goal to establish
sustainable development which was translated as a form of Millenial Development Goals (MDGs)
in 2000. Millenial Development Goals are a set of goals established until 2015 with the aim of
uniting the vision and mission of all philanthropists to achieve sustainable development (MDG
Report, 2015). By 2015, most of the MDG goals are achieved very well, one of which is the 33%
reduction in world poverty rates, accounting for 1990 levels of 47% to 14% by 2015 (MDG Report,
2015). The success of the MDG gave rise to new ambitions for world leaders to re-unite
development goals in other aspects. Armed with the success of the MDG, in September 2015, the
United Nations together with world leaders adopted a series of 17 new goals called Sustainable
Development Goals (SDGs) containing 169 targets for the period 2016 - 2030. The SDGs remain
focused on the unfinished challenges of the MDGs yet also enlarge the focus to new areas such as
energy, employment, infrastructure, municipalities, consumption, climate and peace.
To achieve the success of SDGs, it certainly involves the participation of actors who play an
important role, especially the government as regulator and company as the driving force of the
country's largest economic motor (SDGF Report, 2016). The emergence of new responsibilities for
companies to contribute to SDGs is a matter to be taken into account as it affects the costs that
companies must allocate and sacrifice. Companies need to know how much effort should be made
to contribute to SDGs, but also to add value to the company. Various studies have proven that
sustainability practices contribute positively to company profitability and value (Griffin and Mahon
(1997), Orlitzky (2001), Orlitzky, Schmidt, and Rynes (2003), Margolis and Walsh (2003)), but
little research which focuses on the importance of conformity to corporate sustainability practices
with SDGs and their implications for the company. To this end, this study focuses on the impact
of corporate sustainability practices in accordance with the SDGs and their implications for
company performance, as measured by financial performance and firm market performance.
In addition, the growing availability of sustainability practice information and its implications
for company performance reinforces the importance of information reliability presented to
corporate stakeholders. This has led to the development of assurance services for sustainability
reports to ensure that sustainability reports made as sustainability practices undertaken by the
company are correct. A study conducted by Manetti and Becatti (2009) shows that the development
of sustainable practices in the sustainability report has grown rapidly in recent years and is
predicted to continue as the interests of stakeholders grow toward ensuring the credibility of
sustainability reports made by the company. In doing so, this study attempts to identify the
influence of independent assurance as a booster or weakening of sustainability practice
relationships on company performance.

THEORITICAL REVIEW AND HYPOTHESES DEVELOPMENT

Sustainability practices are increasingly getting developed from ASEAN countries (Loh et al.,
2016). These developments form the core component of business sustainability practices that assess
and disclose non-financial information about their operations and business practices. Trends
emerging from corporate sustainability reporting reflect business awareness about the benefits and
uses of it as it encourages companies to be more transparent about the details of their operations,
reporting on sustainability practices reflecting their commitment to being responsible for their
activities. In a corporate perspective, this transparency enhances its reputation, not only to its
stakeholders and customers, but also to its core human resources, its employees. A company
becomes more aware of its operational efficiency and thereby, can work to improve its
sustainability and financial performance. Furthermore, sustainability practices can serve as a
differentiator for potential stakeholders to invest in companies.
Sustainable Development Goals or hereinafter referred to as SDG, is described as an "ambition"
initiated by the United Nations as a sustainable development agenda designed to make the world
more sustainable and resilient (United Nations, 2015). SDGs are born covering a wide spectrum of
sustainable development topics relevant to companies - such as poverty, health, education, climate
change and environmental degradation - SDGs can help link business strategies with global
priorities (GRI Guideline, 2015) translated into 17 targets strategic. The development of enterprise
sustainability practices towards SDGs is growing rapidly. The KPMG Survey (2017) proves that
the company's sustainability practices that are in line with SDGs are increasing drastically by 43%
of G250 Reporters and 39% of N100 reporters. The survey proved the formation of trends over a
short period since SDGs were first published. In general, the implementation of SDGs that are in
line with business sustainability practices is indicated to have a positive impact on the company.
But there is not much literature on the effects of SDGs on companies, so it is hoped this research
will be the main research for other research on SDGs in business in the future.

Effect of Sustainability Practices by SDGs on Corporate Financial Performance

Lev et al. (2010) states that socially responsible companies can attract consumers who care
about social issues so as to increase sales and performance of the company. Romauli (2012) states
that with the existence of sustainability practices then the welfare and socio-economic life of the
wider community will be more secure. Such conditions will ensure the smooth running of the entire
process or the productivity of the company and the marketing of the company's products, thereby
supporting the company's financial performance. Research conducted by Hu (2013) indicates there
is a positive relationship between sustainability practices and the company's financial performance.
In addition, research by Abu & Ameer, R. (2011) found that firms that emphasize sustainability
practices have higher financial performance, measured through ROA, ROE, earnings before taxes,
and operating cash flows compared to firms that do not practice sustainability. Legendre and
Coderre (2013) provide empirical evidence that corporate adoption of a GRI framework is
positively related to profitability; however, they can not prove the relationship between the GRI
application level and financial performance. To this end, this study attempts to associate high
sustainability practices with companies seeking to allocate resources to achieve SDGs. Thus the
higher sustainability practices undertaken by the company, will have a positive impact on the
company's financial performance.
H1: Sustainability Practices according to SDGs have a positive effect on the company's financial
performance

Effect of Sustainability Practices by SDGs on Company Market Performance

Sustainability practices play an important role in financial information presented periodically
in the financial statements, as sustainability practices show the firm's long-term value creation
through intangible assets (in terms of social and environmental responsibility) and possible risks
and opportunities for the company (Kuyez and Uyer, 2017). Anam et al. (2011) found a positive
relationship between sustainability practices and firm values, based on signaling theories and
emphasized that increasing transparency and disclosure will have an impact on the diminished
misevaluation of stock prices, which will increase the firm's market value (Anam et al. 2011).
Richardson and Welker (2001) also mentioned that the presence of investors who are concerned
about social issues will be willing to pay premiums to socially responsible companies. In a study
conducted by Eccles and Serafeim (2011) by comparing high-sustainability companies and low-
sustainability companies based on management and performance processes, proving that high-
sustainability companies are superior in performance, both in financial performance and market
performance. The research supports the researcher's hypothesis of companies seeking to associate
companies with high-sustainability with companies seeking to achieve SDGs to gain better market
performance, rather than companies that do not.
H2: Sustainability Practices according to SDGs have a positive effect on the company's market
performance

Moderation effect of Independent Assurance on Sustainability Practice Relationships by

SDGs on Financial Performance and Company Market Performance
Sustainability practices are expected have a positive impact on the company's financial
performance and market performance. It is because the sustainability practices expressed by the
company provide a signaling signal (signalling theory) for the company. Sustainability practices
seen in the form of information or corporate disclosure are crucial to both the company and all
stakeholders. For that reason, certainty over the credibility and accuracy of corporate information
is seen as crucial for stakeholders and corporate shareholders. Thus, there is a demand for
independent and professional services to measure the reliability of corporate disclosure information
that can be performed by assurance services. Since the main function of assurance provision is to
ensure the reliability of the information presented by the company to the public, the decision by
the company in the provision of assurance is seen as a tool to ensure that no risk of information is
borne by the public (Asens, 2012). In relation to the main research relationship, insurance is seen
as a monitoring tool of stakeholders and corporate shareholders in ensuring the quality of
information on corporate sustainability practices. Therefore, the use of assurance services is seen
to improve the reliability of corporate information and strengthen the relationship of corporate
sustainability practices on company performance.
Initial research conducted by Cho, et al. (2014) examines the relationship between the
assurance service declaration of the company's sustainability report in relation to the company's
sustainability practices on corporate value in the United States within a year. The study proves
there is no significant relationship between the two. This is not in line with the hypothesis made by
researchers. Arguments in the study mentioned because there are still few companies that use
assurance services and less reflected research results in testing a short period (one year). However,
further research was conducted by Birkey et al. (2016) proves that the use of insurance services
positively affects the social and environmental reputation of the company which further strengthens
the value of the company. The research, reinforced by other research conducted by Gurturk and
Hahn (2015) proves that the credibility, transparency, and internal benefits for management have
a positive effect on the company through the statement of insurance on the company's annual report
that will have a positive effect on the company's performance.
Supported by previous studies, it can be said that the transparency and credibility of the information
presented by the company is very influential on the performance of the company. To that end, the
use of independent assurance services on information presented by the company is indicated to
increase the quality of information that will strengthen the disclosure of sustainability practices and
lead to improved company performance. This is because the use of assurance services to ensure
the quality of information presented so that the increased confidence of stakeholders and users of
the report on the quality of information presented on the company's commitment to sustainability
issues. Through a review of theories and concepts of assurance, it can be concluded temporarily
that:
H3: Independent Assurance strengthens sustainability practice relationships according to SDGs
on Corporate Financial Performance
H4: Independent Assurance strengthens sustainability practice relationships according to SDGs
on Company's Market Performance

RESEARCH METHOD
Sample Selection and Data Collection
The population in this study are all non-financial public companies listed in Indonesia Stock
Market (IDX), Malaysia (Bursa), Singapore (SGX), Philippines (PSEI) and Thailand (SET) in
2016. Samples taken only from the company non-financial public listed on the stock market due to
significant regulatory differences in the financial industry and different financial structures
compared to other industries. The company must issue a sustainability report as well as an
integrated sustainability report with an annual report by 2016 with a GRI index. After fulfilling the
requirements, the company can be sampled in this study. Methods of data collection in this study
using literature study and secondary data documentation. The company's sustainability data is taken
from the company's official website and financial data is retrieved through Thomson Reuters Eikon
and Datastream.

Research Variables
The variables in this study consist of independent variables, dependent variable, moderation
variable, and control variable.
Independent Variables
The independent variable in this study is sustainable practices according to Sustainable
Development Goals (SDGs).
Sustainable Practices based on SDGs (SDG)
The independent variables in this study are sustainability practices as measured by the
measurement of SDGs. In this study, the level of sustainability practice is measured by how much
sustainability practices are conducted by companies with reference to SDGs. To measure this,
researchers conducted a content analysis of the company's sustainability report in accordance with
the GRI 4.0 checklist that contains performance disclosure indicators that are elaborated in detail.
First, the variable testing technique is performed by matching the disclosure of activities in
which there is a company sustainability report with a checklist based on the GRI 4.0 index. Use of
testing techniques based on GRI 4.0 is based on the use of standards conducted at the global level.
Second, sustainability testing by SDGs is matched against each reporting point by GRI 4.0 against
SDGs points (17 targets). In GRI 4.0 reporting of SDGs points, there are 59 items out of 153 GRI
4.0 that do not fit into the SDG Compass mapping indicator because (1) there are some GRI 4.0
items that are not relevant to the fulfillment of SDGs or are already covered in other items, (2) the
purpose of making SDG Compass universally made for all companies throughout the industry so
that the perceived item is specifically transferred to a specific industry standard (SDG Compass,
2015).
 Details:
SDGi : Level index of sustainability practices by SDGs
" 𝑋 : Number of items disclosed (With a scale of 1-5 in each SDGs point)
n : Number of SDGs (17 indicators)

Dependent Variables
The dependent variables in this study consist of the company's financial performance (ROA and
ROE) and the company's market performance (Tobin's Q and MBV).
Return on Asset (ROA)
Ang (1997) states that Return On Assets (ROA) is one of the main ratios to measure the
profitability of a company. Asset Reciprocity is one form of profitability ratios to measure a
company's ability by measuring the funds invested or incurred for its operations in the hope of
making a profit by utilizing its assets. With reference to previous research (Marti, 2016, Ameer,
2012) The Asset Reciprocity Formulas are stated as follows:
#$% '()*+$
Return on Assets (ROA) =
,*%-. -//$%/

Return on Equity (ROE)

ROE is a fundamental ratio to see the effectiveness of companies in using capital from
investors. The basic idea of this rate of return is that the rate of return is based on the point of view
of shareholders. In a study undertaken by Moskowitz (1972) and Vance (1975) it was stated that
the change in equity turnover became one of the indices to measure the effectiveness of firms to
give returns to investors. ROE shows how the company's management can grow the value of the
company by increasing the profitability of the company. The equity equity formula is expressed as
follows:
#$% '()*+$
Return on Equity (ROE) =
01-2$1*.3$2 4 / 5678%"

Tobin’s Q (Tobin)
This ratio can be interpreted as the market value of the outstanding shares and the company's
debt to the company's assets (Sugiharto, 2009). The operationalization of this variable is defined
as the value of less than one indicating the market value of the firm is less than the undervalued
asset value. Conversely, if the ratio value is more than 1, then indicates the market value of the
company is greater than the carrying amount of the company's assets (overvalued). In this study,
researchers used Tobin's Q proxies that have been used in previous studies (Chung and Pruitt,
1994); (Faleye et al., 2011); (Conheady et al., 2015); (Kuyez and Uyar, 2016) formulated as
follows:
Tobin’s Q = Total Debt + Market Capitalization
Total Asset
Market-to-Book Value (MBV)
In determining this approach, firm value is used in investor perceptions of firms viewed from
the company's historical information on the company's future performance projection (Zulaikha,
2017). In the MBV approach, the company's value is rated as the company's growth opportunity.
The measurement is in accordance with Myers' (1987) study which views the value of a firm as the
total asset value and growth prospects for making future investment decisions. The value of the
firm can then be seen by calculating the MBV value after taking into account the book value per
share (Brigham and Gapenski, 1994). The implication of using this ratio is that the greater the MBV
value of the firm, the greater the growth of corporate opportunities in the eyes of investors.
Market to book ratio = Market price per share
Common Equity / Shares outstanding

Moderation Variable
The moderation variable is the variable that influences the relationship between the dependent
variable and the independent variable. In this study, the moderation variable consists of assurance
variables.
Assurance
The assurance variable as a moderating variable is used to prove hypotheses 3 and 4 that measure
the effect of moderation of assurance on the firm's sustainability practice relationship to firm
performance. Assurance in question is an assurance service provided by an independent party to
the company's sustainability report. Measurements of these variables were performed using dummy
techniques, ie scorinsg 1 on sustainability reports using assurance and score 0 on sustainability
reports that did not use assurance services (Cho, et al., 2016). The implication of using assurance
variable as moderation variable in this research is interpreted as the main research relation, ie the
relationship of company sustainability practice according to SDGs to company performance. The
moderation variable in this study is denoted by Ass_SDG in the research model.

Control Variables
Control variables are used as independent variables that aims to measure the relationship of
independent variables to the dependent variable by controlling certain factors outside the dependent
variable. The control variables consist of firm size, firm leverage level, company industry
classification, country of origin of capital market of company, and capital market capitalization of
state company.
Company Size
The capital market capitalization figures used are the annual average figures with the aim of
eliminating abnormal movements of the stock market in certain quarters. Based on Fiori et al.
(2007), the size of the company is measured by the total market capitalization. From previous
studies, the size of the company's market capitalization was influenced by the company's ability to
practice sustainability. For that, the measurement of company size can be described as follows
(Dina, 2011):
Size = LN [Market Cap]
Leverage
With departing from agency theory, corporate leverage levels have a major impact on the
company's sustainability practices (Ho and Taylor, 2007; Reverte, 2009). Jensen and Meckling
(1976) argue that firms with high levels of leverage will disclose more voluntary information to
reduce agency costs between firms and stakeholders, which will lower the cost of capital or capital
costs. In this case, this relationship is said to be the company's ability to generate financial returns
derived from the ease of obtaining capital. Following up with Kuyez and Uyar (2016) and Ameer
(2012) studies, the Debt to Asset ratio equation is illustrated as follows:

Debt to Asset Ratio = Total Debt / Total Assets

Industry Classification
Previous studies have proven that industrial affiliations between sensitively sensitive and
environmentally sensitive industries have a significant effect on the company's sustainability
practices (Brammer and Pavelin, 2008; Reverte, 2008; Kansal et al., 2014; Shamil et al., 2014) .
Furthermore, Legendre and Conderre (2013) and Branco et al., (2014) also prove that sustainability
practices according to GRI application level and independent assurance are positively related to
the industry's affiliates. The argument from previous research is that the environmentally sensitive
industry will be more motivated in conducting sustainability practices, because the company's
operations are directly related to the environment and social (Liu and Anbumozhi, 2009). It relates
to the risks and pressures borne by the company from the stakeholder linkages of the company
(Legendre and Coderre, 2013). Thus, companies from environmentally sensitive industries will be
more motivated to practice sustainability. The basis of industry affiliation grouping is based on
Roberts (1992) study which defines the industry sensitive to high cumin visibility, high level of
political risk, and concentrated intense competition. . Industry affiliates are grouped with a score
of 1 for environmentally sensitive industries and a score of 0 for industries that are not
environmentally sensitive. The following are sensitive and non-sensitive industrial classifications
on research:
Sensitive Industry Insensitive Industry
Household and Personal
Real Estate Chemicals
Products
Conglomerates Logistics Media
Construction Energy Utilities Non-Profit / Services
Mining Construction Materials Commercial Services
Agriculture Water Utilities Food and Beverage Products
Energy Automotive Technology Hardware
Telecommunications Equipment Aviation Tourism/Leisure
Tobacco Retailers
Railroad Healthcare Services
Source: Researcher’s (2018)
Country
In this study, the study sample was taken from five countries namely Indonesia, Malaysia,
Singapore, Philippines and Thailand. To control the differences in the ability of the state enterprise,
the state variable is used as a control variable. In the operationalization of variables, used dummy
variables to control the differences between countries by making Indonesia as a reference.

Research Method
Multiple Regression on Main Research Model
To test the influence of sustainability practices according to SDGs on company financial
performance (Hypothesis 1) and company market performance (Hypothesis 2), multiple regression
analysis using Ordinary Least Square (OLS) regression technique is used.
Here is a regression model for hypotheses 1 and 2:

Hypothesis 1
𝟗

ROA𝒊 = 𝛂 + β𝟏 SDG𝒊 + β𝟐 Assurancei + β𝟑 SIZE𝒊 + β𝟒 𝑳𝑬𝑽𝒊 + β𝟓 𝑰𝒏𝒅_𝑪𝒍𝒂𝒔𝒔𝒊 + 𝜷i D_countryc + ei

𝒄O𝟔
𝟗

ROE𝒊 = 𝛂 + β𝟏 SDG𝒊 + β𝟐 Assurancei + β𝟑 SIZE𝒊 + β𝟒 𝑳𝑬𝑽𝒊 + β𝟓 𝑰𝒏𝒅_𝑪𝒍𝒂𝒔𝒔𝒊 + 𝜷i D_countryc + ei

𝒄O𝟔
Hypothesis 2
𝟗

Tobin𝒊 = 𝛂 + β𝟏 SDG𝒊 + β𝟐 Assurancei + β𝟑 SIZE𝒊 + β𝟒 𝑳𝑬𝑽𝒊 + β𝟓 𝑰𝒏𝒅_𝑪𝒍𝒂𝒔𝒔𝒊 + 𝜷i D_countryc + ei

𝒄O𝟔
𝟗

MBV𝒊 = 𝛂 + β𝟏 SDG𝒊 + β𝟐 Assurancei + β𝟑 SIZE𝒊 + β𝟒 𝑳𝑬𝑽𝒊 + β𝟓 𝑰𝒏𝒅_𝑪𝒍𝒂𝒔𝒔𝒊 + 𝜷i D_countryc + ei

𝒄O𝟔
Details:
ROAi : Return on asset of firm i at the end of research period
ROEi : Return on Equity of firm i at the end of research period
Tobini : The value of Tobin's Q firm i at the end of the study period
MBVi : The value of the company's Market to Book ratio at the end of the study period
SDGi : Score firm i sustainability practice according to SDG refers to GRI 4.0
Assurancei : Use of assurace services on sustainability reports, score = 1 using, score = 0 not
SIZEi : Company size measured by market capitalization i
LEVi : Ratio of debt to asset of firm j at the end of research period
Ind_Classi : Classification Industry company j at the end of the study period, score = 1 sensitive
environment, score = 0 is not environmentally sensitive
D_countryc : Dummy country based on country of origin capital market company (c = country)

Multiple Regression on Moderation Research Model

To test the effect of independent assurance services on the company's sustainability practices on
financial performance (Hypothesis 3) and company's market performance (Hypothesis 4), multiple
regression analysis using Ordinary Least Square (OLS) regression technique is used.
Here is a regression model for hypotheses 3 and 4:
Hypothesis 3
𝟏𝟎

ROA𝒊 = 𝛂 + β𝟏 SDG𝒊 + β𝟐 Assurancei + β𝟑 Ass_SDGi +β𝟒 SIZE𝒊 + β𝟓 𝑳𝑬𝑽𝒊 + β𝟔 𝑰𝒏𝒅_𝑪𝒍𝒂𝒔𝒔𝒊 + 𝜷i D_countryc + ei

𝒄O𝟕
𝟏𝟎

ROE𝒊 = 𝛂 + β𝟏 SDG𝒊 + β𝟐 Assurancei + β𝟑 Ass_SDGi +β𝟒 SIZE𝒊 + β𝟓 𝑳𝑬𝑽𝒊 + β𝟔 𝑰𝒏𝒅_𝑪𝒍𝒂𝒔𝒔𝒊 + 𝜷i D_countryc + ei

𝒄O𝟕
Hypothesis 4
𝟏𝟎

Tobin𝒊 = 𝛂 + β𝟏 SDG𝒊 + β𝟐 Assurancei + β𝟑 Ass_SDGi +β𝟒 SIZE𝒊 + β𝟓 𝑳𝑬𝑽𝒊 + β𝟔 𝑰𝒏𝒅_𝑪𝒍𝒂𝒔𝒔𝒊 + 𝜷i D_countryc + ei

𝒄O𝟕
𝟏𝟎

MBV𝒊 = 𝛂 + β𝟏 SDG𝒊 + β𝟐 Assurancei + β𝟑 Ass_SDGi +β𝟒 SIZE𝒊 + β𝟓 𝑳𝑬𝑽𝒊 + β𝟔 𝑰𝒏𝒅_𝑪𝒍𝒂𝒔𝒔𝒊 + 𝜷i D_countryc + ei

𝒄O𝟕
Details: Ass_SDGi : Moderation Effect of Independent Assurance on Sustainability Report’s Firm i

RESEARCH ANALYSIS
Description of Research Samples
Based on data collected on non-financial public corporations listed on Indonesia capital market
(IDX), Singapore (SGX), Philippines (PSE), Malaysia (Bursa), and Thailand (SET), there are 3191
companies in the study population. Samples taken are companies from all industries, except the
financial industry due to significant regulatory differences. With some sample selection
requirements, 127 companies selected were selected as research samples.
Table 1
Research Sample

Firm listed on Firm reporting

Non-GRI Incomplete
Country Stock market Sustainability Samples
Report Data
(2016) Report (2016)

Singapore (SGX) 611 35 13 0 21

Malaysia (Bursa) 938 35 13 4 18
Thailand (SET) 778 75 19 2 55
Philipinnes (PSE) 265 8 0 1 7
Indonesia (IDX) 599 40 12 2 26
Total 3191 193 (57) (9) 127
Source: Researcher’s (2018)

Variable Description
Table 2
Descriptive of Statistics Results
Variables N Mean Std. Dev Min Max
SDGS 127 0.176851 0.126066 0.003274 0.549671
ROA 127 0.499995 0.059038 -0.299200 0.152050
 ROE 127 0.113321 0.128857 -0.421000 0.575452

Tobins 127 1.470751 0.674999 0.100675 3.595495

MBV 127 2.378656 2.324746 0.211319 13.317410

SIZE 127 3,578.695 5,375.205 29.258860 29,783.520

LEV 127 0.511443 0.185747 0.065957 0.918472

Ind_Class 127 0.842519 0.365695 0 1

D_SING 127 0.165354 0.372971 0 1

D_MALAY 127 0.141732 0.350156 0 1

D_THAI 127 0.433070 0.497462 0 1

D_PHIL 127 0.055118 0.229114 0 1

Assurance 127 0.181102 0.386628 0 1

Details:
SDGS : Company sustainability practices according to SDGS (GRI Score)
ROA : Return on Asset or Return on company assets
ROE : Return on Equity or Return on equity of a company
Tobins : Tobin's Q or Company Value
MBV : Market to Book Value
SIZE : Company size, measured by Market Capitalization (Million USD)
LEV : Corporate leverage
Ind_Class : Industry Classification Company, 1 = sensitive, 0 = insensitive
D_country : Country dummy variable, Indonesia as reference
Assurance : Independent insurance services, 1 = use, 0 = no use
Ass_SDGs : Moderation, SDGS * Assurance
Source: Researcher’s, Stata 13 (2018)
Based on the table above, obtained sample of 127 companies after the sample testing process.
Independent variables in this study were SDGS with an average value of 0.17685111, standard
deviation 0.1260667, minimum 0.003274, and maximum 0.5496712. From these statistics can be
seen the average sustainability practice of 17.68% indicating the level of corporate sustainability
practices in the ASEAN region is still relatively low, but it also indicates that the company started
to practice sustainability by referring to the SDGs. The lowest value of sustainable practices in
Wheelock Properties (Singapore) is 0.003274 and the highest value of sustainability practice by
Astra Agro Lestari Tbk (Indonesia) is 0.5496712.
The dependent variable consists of ROA, ROE, Tobins, and MBV. The ROA variable has an
average of 0.499995, the standard deviation of 0.590387, the minimum value of -0.2992 and the
maximum value of 0.15205. From statistical results, the minimum ROA is owned by PT Bumi
Mineral Resources Tbk (Indonesia) and the maximum value of ROA by Intouch Holding PCL
(Thailand). While ROE variables that are implemented as returns per equity, have a mean value of
0.1133215, standard deviation 0.1288573, minimum value -0.42100, and the maximum value of
0.5754529. The minimum value is obtained by Bakrie Sumatera Plantation (Indonesia) and
maximum value of Intouch Holding PLC (Thailand). ROA and ROE are used in this study to
measure the company's financial performance, but when compared to the standard deviation and
the mean value of both the ROE value is more diversified than the ROA value in the research
sample. This was happened because the differences in equity between countries that reflect
differences in sources of equity companies vary based on the level of ability of companies in
obtaining capital.
Furthermore, the value of Tobins has a mean of 1.470751, standard deviation 0.674999,
minimum value 0.1006754, and maximum value 3.5954951. The minimum value is generated by
Frasers Commercial Limited (Singapore) and the maximum value of Tobins produced by QTC
Energy PLC (Thailand). The fourth independent variable is MBV has a mean of 2.378656, standard
deviation 2.324736, minimum value 0.0211319 and maximum value 13.31741. Minimum value is
generated by Bumi Resources Tbk (Indonesia) and maximum MBV value is generated by Bakri
Sumatera Plantations (Indonesia). When compared between the value of Tobins Q and MBV values
among the research samples, the MBV value of the diversified firm is greater than the mean value
of MBV compared to the Tobins Q score. This is seen from the magnitude of MBV standard
deviation values whose value is much greater than the standard deviation value of Tobins Q.
Control variables include SIZE, LEV, Ind_Class and Country Dummy. The SIZE variable has
an average of 3578,695 (million USD), standard deviation of 5375,205, minimum value 29.25886
(million USD) and maximum value of 29783.52 (million USD). While the leverage value has a
mean value of 0.5114431, standard deviation 0.1857471, minimum value 0.0659579, and
maximum value 0.9184728. Then the Ind_Class variable symbolizes the company's industry-
sensitive environment. The average value of Ind_Class is 0.8425197, standard deviation
0.3656956, minimum value 0 and maximum value 1. Minimum and maximum value is binomial
number because it uses dummy variable. Furthermore, the country's dummy represents the highest
SDGS average value owned by Thailand, followed by Singapore, Malaysia, the Philippines and
Indonesia. It can be seen in Table 2 that the most diversified data is seen in Thai countries due to
the large number of samples of companies from Thailand.
From the descriptive statistical analysis above, it can be seen statistical development of
sustainability practices per points of SDGs. When compared to per SDG points, the highest mean
values are owned by: SDG points 9 (Building robust infrastructure, promoting inclusive and
sustainable industrialization, and encouraging innovation); SDG 11 (Making cities and human
settlements inclusive, safe, resilient and sustainable); and SDG 7 (Ensuring access to affordable,
reliable, sustainable and modern energy for all humans). This shows that the development of
sustainability practices, especially in five ASEAN countries on the points of the SDG. Furthermore,
company sustainability practices according to SDGs can be compared across countries to view
sustainability practices by country. Here's a comparison of sustainability practices by companies
in TOP 5 ASEAN countries.
 Graph 1
Level of Corporate Sustainability Practices by Country
0.3
0.2
0.1
0
Indonesia Singapore Malaysia Thailand Philippines

Source: Researcher’s (2018)

In graph 1, it can be seen that the highest level of sustainability practice is done in Philippines with
average rate (19.22%) followed by Thailand (18.12%), Malaysia (17.47%), Indonesia (15.18% )
and Singapore (9.33%). This average result shows a unique result because even though the
Philippine average score occupies the first position, but the number of companies expressing
sustainability practices is the least (7 samples) compared to the number of samples in other
countries. Followed by Thailand which has the number of companies that practice the most
sustainability in research (55 companies). After the analysis, the Thai government implemented
the practice of Sustainable Development Goals in early 2016 and is mandatory for the company.
When compared to other countries, regulations on new SDGs are implemented in late 2016 (United
Nations, 2016).

RESEARCH ANALYSIS
Result of Regression of Main Research Model
Based on the results of calculations with multiple regression equation on the main research
model that is on hypothesis 1 and hypothesis 2 obtained the following results:
Table 3
Result of Regression of Main Research Model
(1) Research Model H1 (2) Research Model H1
Dependent Dependent
Variable: Expecta Variable: Expecta
ROA Coefficient P>t ROE Coefficient P>t
tion tion
Variabel Variabel
SDGS + 0.1319519 0.001*** SDGS + 0.2342879 0.0045***
Assurance + -0.0444371 0.001*** Assurance + -0.1040207 0.000***
SIZE + 0.0140878 0.000*** SIZE + 0.0350122 0.000***
LEV + 0.0163533 0.0278** LEV + 0.0968519 0.04**
Ind_Class + 0.0106237 0.223 Ind_Class + 0.0276403 0.156
d_Sing 0.009449 0.285 d_Sing 0.0228763 0.259
d_Malay 0.0182398 0.152 d_Malay 0.0536768 0.0935
d_Thai 0.0357393 0.004 d_Thai 0.0875174 0.001
d_Phil 0.0343555 0.072 d_Phil 0.0837139 0.045
_cons -0.0859272 _cons -0.2853652
 Number of Number of
Prob > F 0.0000 Prob > F 0.0000
Observ. Observ.
127 Adjusted R-squared 0.1993 127 Adjusted R-squared 0.2782
(3) Model Penelitian H2 (4) Model Penelitian H2
Dependent Dependent
Expecta Expecta
Variable: Coefficient P>t Variable: Coefficient P>t
tion tion
Tobins MBV
SDGS + 0.6049559 0.094* SDGS + -0.0792072 0.481
Assurance + -0.699184 0.000*** Assurance + -2.018982 0.000***
SIZE + 0.1563273 0.000*** SIZE + 0.5465195 0.000***
LEV + 0.1907495 0.215 LEV + 1.675263 0.068*
Ind_Class + -0.3302913 0.015** Ind_Class + -0.3823056 0.245
d_Sing -0.342379 0.023 d_Sing -0.3867309 0.244
d_Malay 0.1547106 0.212 d_Malay 0.3849448 0.285
d_Thai 0.3560992 0.007 d_Thai 1.033948 0.027
d_Phil 0.3051631 0.120 d_Phil 0.8245219 0.164
_cons 0.4266325 _cons -2.152641
Number of Number of
Prob > F 0.0000 Prob > F 0.0004
Observ. Observ.
Adjusted R-squared 0.2685 Adjusted R-squared 0.1605
***Significant on α 1% ** Significant on α 5% * Significant on α 10%
Keterangan:
H1 (1): Sustainability practices according to SDGS have a positive effect on company ROA
H1 (2): Sustainability practices according to SDGS have a positive effect on the ROE of the Company
H2 (3): Sustainability practice according to SDGS positively affects the company's Tobin's Q
H2 (4): Sustainability practice according to SDGS positively affects the company MBV
SDGS: Company sustainability practices by SDGS, Assurance: Independent insurance services, 1 = use, 0 = no
use, ROA: Return on Asset or Return on assets, ROE: Return on Equity or Tobin's Q or Value of Company,
MBV: Market to Book Value, SIZE: Company size with calculated natural logarithm of the company's market
capitalization, LEV: Corporate leverage, calculated by total debt / total assets, Ind_Class: Industrial Classification
Company, 1 = environmentally sensitive, 0 = no sensitive, d_country: dummy state variable.
Sources: Researcher’s STATA13 (2018)

Hypothesis 1

Hypothesis 1 states that the company's sustainability practices have a positive effect on the
company's financial performance. In testing this hypothesis, the researcher examined the effect of
the company's sustainability practice by using two dependent variable approaches: ROA (Research
Model 1) and ROE (Research Model 2).

The company's sustainability practice using scoring SDGs using GRI 4.0 scoring on each firm
is measured in terms of the company's financial performance as measured by ROA or asset
turnover. One of the benefits of SDGs in a business that implements them is improved company
relations with stakeholders (SDG Compass, 2016) because of increased stakeholder confidence in
the company. The relationship covers the relationships of stakeholder companies in the form of
distributors, suppliers, employees and the public, and others. One of the improved forms of
corporate relationships is with the company's assessment of suppliers. By racing on SDGs, the
company's suppliers must also be in line with the SDGs. As the company's supply chain improves,
the company's negative externalities will decrease and cause the company's costs to pay for reduced
costs. While the survey of KPMG (2017) states that there is increasing awareness of the community
on environmental and social issues and it causes a shift in public preference towards product
selection. With improved corporate relationships with all stakeholders, the ability of the company
will be better in generating profits. In addition, with reference to SDGs will provide a common
goal for the company in operating better (Bank Ki Moon, 2016). Thus, firms with higher
sustainability practices will result in greater returns than firms that do not practice sustainability.

It is the underlying hypothesis 1 that the company's sustainability practices according to SDGs
will positively affect the reciprocal assets of the company. Based on the results of regression
hypothesis 1, stated that the value of coefficient of 0.1319519 with the level of significance (p> t
value) of 0.0001 meaning that every increase of one point SDGS will result in an increase in ROA
value of 0.1319519. By looking at these results can be interpreted that from the ROA approach,
hypothesis 1 is accepted.

The results of this regression are in accordance with a study conducted by Santis et al. (2016)
which proves the performance of companies that practice sustainability will be better than
companies that do not practice sustainability. Other studies that support a positive relationship
between sustainability practices and firm performance are Waddock and Graves, 1997; Liu and
Anbumozhi, 2009; Artiach et al., 2010; Branco and Lourenco, 2013; Kansal et al. 2014.
Furthermore, companies with high sustainability will also increase operational effectiveness as all
operations are based on the same objectives of SDGs (SDG Compass, 2016).
The second approach in testing the relationship of sustainability practices according to the
SDGs on financial performance is through the calculation of the company's ROE. It is stated in
table 3 that the coefficient level of 0.2342879 with significance level (p> t value) is 0.0045 which
means that every increase of one point SDGs will result in an increase in ROE value of 0.2342879.
These results indicate that there is a positive relationship between the company's sustainability
practices and the company's ROE. Therefore, from the ROE approach, hypothesis 1 is accepted.
This result is in line with Santis et al. (2016) which states that companies that have
sustainability activities have better equity returns than companies that do not have sustainability
activities. This result is also supported by the appropriateness of the theory of corporate citizenship
which states that the company as a citizen undertakes additional obligations to maintain
sustainability, will get additional rights in the form of returns resulting from the activity (Iwu-
Egwuonwu, 2010). With the development of corporate activities based on people's desire to support
SDGs, stakeholders will better assess the company. This will reduce the risk of the company and
lead to reduced cost of capital of the company. With the reduced cost of capital the firm must use
to finance its capital, the company's ability to allocate resources to operate will be greater
(Rodriguez et al., 2006). The results of this model are also supported by the stakeholder concept
which states that with the company performs corporate responsibility not only for the interests of
the shareholders, but also the interests of the company's stakeholders. Along with the development
of SDGs practice, all distribution channels undertaken by the company can be assessed from the
level of company sustainability practices (GRI, 2010). Therefore, firms that practice higher
sustainability practices will have a higher chance of gaining higher returns because the entire
supply chain will also improve the company's ability to allocate equity. This is supported by
Laplume et al. (2008) which states that the foundation of the stakeholder concept is that the
organization must be managed in the interest of all stakeholder constituents, not only for the
shareholders' interests. It therefore provides an opportunity for stakeholders to develop themselves
both materially and morally through their mutually constructive relations (Inaki et al., 2007).

Hyphotesis 2
Hypothesis 2 states that the company's sustainability practices have a positive impact on the
company's market performance. In testing this hypothesis, the researcher examines the influence
of company sustainability practices and their impact on the market performance of the company
by using two dependent variable approaches namely Tobin's Q (research model 3) and Market-to-
Book Value (research model 4).
The company's market performance in this study is considered the value of the company
reflected as the perception of investors and stakeholders towards the company. based on the
signaling theory, the relevance of sustainability practices to firm value has a strong relationship as
the market will assess information on sustainability practices as a reflection of the actual state of
the enterprise. Sustainability practices result in value creation in the long-term due to a reduction
in corporate risk in the operation and increment of the company's intangible assets (Kuyez and
Uyar, 2016). In addition, research conducted by Richardson and Welker (2001) states that the
presence of investors who care about social issues will be willing to pay more premiums to socially
responsible companies. This reflects, with the increasing level of corporate sustainability practices,
the market perception of the company will improve. In other words, the company's sustainability
practices have a positive effect on the company's market performance. It is the underlying
hypothesis 2.
In regression result in table 4.8, it is known that the coefficient value in Tobin's Q is 0.6049559,
with significance level (p> t value) of 0.094 which means that every increase of one point of SDGS
will result in a company value of 0.6049559. Looking at these results can be interpreted that from
Tobin's Q approach, hypothesis 2 is accepted.
The results of this regression are in accordance with research conducted by Eccles and Serafeim
(2014) which proves that high-sustainable companies have better market performance than low-
sustainabile companies. In addition, the regression results are also in line with the theory of
resource allocation that states if organizational resources and capabilities are valuable, scarce and
unequaled, it will be a source of competitive advantage for an organization (Barney 1991) one of
them by allocating company resources into sustainability practices according to SDGs.
While the regression in table 4.8 on the dependent variable MBV, the coefficient value of -
0.0792072 with significance level (p> t value) of 0.481 means that every increase of one point
SDGS will result in the company value of --0.0792072. Looking at these results can be interpreted
that from the MBV approach, hypothesis 2 can not be proven.
This result is in line with research conducted by Zulaikha (2017) which states there is no significant
influence between the level of corporate sustainability practices on company performance using
market-to-book value approach. Reasons for not finding a significant relationship due to: 1) the
use of MBV contains an accounting estimate element in the form of estimating the reduction of
asset value so that there is potential for bias because the research is only conducted in one year
period; 2) It can be said that the use of the MBV approach is not appropriate if the study period is
only within one year. With the result that hypothesis 2 of the Tobin's Q sequence is accepted while
hypothesis 2 of the MBV approach is rejected, it can be said that the measurement of appropriate
market performance to measure the impact of the firm's sustainability level on firm value is Tobin's
Q. That is because Tobin's Q calculates the value of inflation in the calculation of replacement cost
compared with the book value which only takes into account the estimated impairment of asset
value.

Regression Result Moderation Research Model

After testing the main research model, the researcher will try to test the main research model
by adding the moderation variable. This is done to see the impact of moderation variables on the
relationship of independent variables and dependent variables in the main research model.
Table 4
Regression Result Moderation Research Model
(5) Research Model H3 (6) Research Model H3
Dependent Dependent
Expecta Expecta
Variable: Coefficient P>t Variable: Coefficient P>t
tion tion
ROA ROE
SDGS + 0.1700311 0.0005*** SDGS + 0.3013142 0.0025***
Assurance + -0.0106496 0.345 Assurance + -0.0445486 0.217
Ass_SDG + -0.1445421 0.078* Ass_SDG + -0.2544202 0.114
SIZE + 0.0132986 0.000*** SIZE + 0.0336231 0.000***
LEV + 0.0152633 0.0261** LEV + 0.0987705 0.043**
Ind_Class + 0.0073539 0.286 Ind_Class + 0.0256522 0.169
d_Sing 0.0148922 0.191 d_Sing 0.0324573 0.169
d_Malay 0.0199695 0.130 d_Malay 0.0567213 0.062
d_Thai 0.0365054 0.003 d_Thai 0.0888658 0.0005
d_Philip 0.0237009 0.119 d_Philip 0.0640598 0.104
_cons -0.0875928 _cons -0.2882971
Num. of Num. of
Prob > F 0.0000 Prob > F 0.0000
Observ. Observ.
127 Adjusted R-squared 0.2064 127 Adjusted R-squared 0.2811
(7) Research Model H4 (8) Research Model H4
Dependent Dependent
Expecta Expecta
Variable: Coefficient P>t Variable: Coefficient P>t
tion tion
Tobins Q MBV
 SDGS + 0.7382536 0.092* SDGS + -05573338 0.393
Assurance + -0.5809097 0.028** Assurance + -2.443222 0.015**
Ass_SDG + -0.5059742 0.325 Ass_SDG + 1.814884 0.330
SIZE + 0.1535648 0.000*** SIZE + 0.5564283 0.000***
LEV + 0.1945651 0.261 LEV + 1.661577 0.075*
Ind_Class + -0.334245 0.014** Ind_Class + -0.3618239 0.254
d_Sing -0.3551839 0.033 d_Sing -0.455076 0.260
d_Malay 0.1607654 0.205 d_Malay 0.3632266 0.307
d_Thai 0.3587808 0.007 d_Thai 1.024329 0.030
d_Philip 0.2678663 0.163 d_Philip 0.9583022 0.170
_cons 0.4208018 _cons -2.131726
Num. of Num. of
Prob > F 0.0000 Prob > F 0.0008
Observ. Observ.
127 Adjusted R-squared 0.2635 127 Adjusted R-squared 0.1546
***Significant on a α 1% ** Significant on α 5% * Significant on α 10%
(H3) Assurance strengthens positive relationships Sustainability practices by SDGS on corporate financial
performance
(H4) Assurance strengthens positive relationships Sustainability practice according to SDGS on company's
market performance
Information:
SDGS: Company sustainability practices by SDGS, Assurance: Independent insurance services, 1 = use, 0 =
not using, Ass * SDG: Moderation, SDGS * Assurance, ROA: Return on Asset or Return on assets, ROE:
Return on Equity or Return on equity of the firm, Tobins: Tobin's Q or Corporate Value, MBV: Market to
Book Value, SIZE: Company size by calculating the natural logarithm of the firm's market capitalization,
LEV: Corporate leverage, calculated by total debt / total assets, Ind_Class: Company, 1 = environment
sensitive, 0 = insensitive, d_country: country dummy variable
Sources: Researcher’s STATA13 (2018)

Hyphotesis 3
In testing the main relationship, it is proved that the company's sustainability practices have a
positive effect on the company's financial performance. Meanwhile, this time the researchers will
test Hypothesis 3 which states that the use of assurance services in the company will strengthen the
relationship of sustainability practices on the company's financial performance. Researchers test
the hypothesis by using two approaches, namely the dependent variable ROA and ROE.
In table 4 equation 6, in the dependent variable ROE known Ass_SDG coefficient value of -
0.2544202 and significance value (p> t value) of 0.114. Based on these results, it can be argued
that this model test of assurance service usage does not have a significant impact on the relationship
of sustainability practices to the company's financial performance. The results of this test are in
line with the research of Cho et al. (2014) who examined the relationship between the use of
assurance services in the company's sustainability report on company performance and found no
significant relationship between the two.
However, by looking at table 4 equation 5, in equation of ROA variable known coefficient
value of Ass_SDG equal to -0.1445421 with significance value (p> t) equal to 0.078. These results
indicate that moderation of assurance variables weaken the positive relationship between
sustainability practices on corporate financial performance. In the development of the hypothesis
stated that the use of assurance services will strengthen the relationship of corporate sustainability
practices to the company's financial performance based on the research of Gurturk and Hahn (2015)
proving that assurance in companies that have high level of sustainability practice will be more
effective in operation because assurance ensures credibility, transparency, and internal benefits that
subsequently affect the company's performance. In this case, researchers see the use of assurance
services in the company's sustainability practices to make the cost to be used by companies greater
than companies that do not use assurance services. In addition, the small number of research
samples as well as the number of firms using assurance services can be one of the reasons for
finding outcomes contrary to the original hypothesis. Thus, according to the research model 3
equation 5, hypothesis 3 is rejected. However, researchers have found that the use of assurance
services weakens the relationship of corporate sustainability practices to the company's financial
performance.

Hypothesis 4
In testing the main model, it is proved that the company's sustainability practices have a positive
effect on the company's market performance. Meanwhile, this time the researchers will test
Hypothesis 3 which states that the use of assurance services in the company will strengthen the
relationship of sustainability practices on the company's market performance. Researchers tested
the hypothesis using two approaches, namely the dependent variable Tobin's Q and MBV.
Based on the results of regression in table 4 seen that the coefficient value of Ass_SDG
(0.461048) with significance value (p> t value) 0.676. These results then prove that the use of
assurance services has no significance to the company's market performance. Thus, according to
research model 4, hypothesis 4 is rejected.
In testing the hypothesis, it is seen that the use of assurance services will increase the value of
the company. It is based on signalling theory which sees that investors value information provided
by companies with assurance services more reliable than companies that do not use assurance
services. With the results of research, assurance services do not have an impact on the company's
market performance. One reason there is no significant relationship is the use of assurance services
is assumed not to be the main factor determining the increase in corporate value. Another
explanation is that the use of assurance services is unknown to investors because the research was
used during the same period. The test results in this model are in line with the research of Cho et
al. (2014) who examined the relationship between the use of assurance services in the company
sustainability report on the performance of the company's market and found no significant
relationship between the two.

CONCLUSION
This study was conducted to see the effect of sustainability practices on company performance,
both on financial performance and market performance. In addition, this study also tries to identify
the moderating effects of independent assurance on sustainability practices relationships and
financial and market performance of the firm. The sample used is a non-financial public company
listed on IDX, SGX, Exchange, PSEI, and SET that issues sustainability reports in both separate
reports and integrated reports in 2016.
In accordance with a series of previous research trials:

1. The company's sustainability practices based on SDGs have a positive effect on the
company's financial performance because applying the company's SDGs increases the
company's effectiveness by providing positive common goals, improving the company's
relationship with the entire company's supply chain so that all of its operations are
sustainable, company stakeholders. The results of this study are in line with the theory of
resource allocation that states if resources and organizational capabilities are valuable,
scarce, and unequaled, it will be the source of an organization's competitive advantage
(Barney, 1991) one of them by allocating company resources to improve effectiveness
companies by conducting sustainability practices according to SDGs.
2. The company's sustainability practices based on SDGs have a positive effect on the
company's market performance because with the company's management committed to
SDGs, in addition to obeying the rules the government will provide long-term investment
for the company. It is seen as a positive action for investors because the company judges
not only to be responsible with investors, but also to all stakeholders and for mutual
progress. This result is also in line with the signal theory underlying positive signaling will
increase the value of the company for investors.
3. Effect of moderation of independent assurance services weakens the relationship of
corporate sustainability practices based on SDGs on the company's financial performance.
Some of the things that can be explained in this study are (1) the use of assurance services
in the company's sustainability practices will incur additional costs for the company so the
company must allocate additional resources of the company to use assurance services and
(2) the number of research samples in this study using independent assurance services on
the sustainability report is still very minimal.
4. The effect of moderation of independent assurance services has no significant relationship
to the relationship of corporate sustainability practices on the basis of the SDGs in the
company's market performance. This result is because the use of assurance services is not
considered to have a significant impact on the credibility of information that the company
reports to investors. Can be assumed, investors consider the adoption of SDGs in the
company enough to provide added value compared to companies that are slow in adopting
SDGs. Thus the use of assurance services is considered not provide significant added value
to the value of the company.

RESEARCH LIMITATION AND SUGGESTION

It is inevitable that this study has limitations that can be considered for further research to avoid
the limitations of this study. Among them:
 1. The study is limited to the geographical area of Southeast Asia that does not have significant
market capitalization differences, so that further research can expand the sample in
Southeast Asian countries.
2. The amount of data is limited because of the lack of adoption of SDGs implementation in
the sample, so that further research can conduct research with a longer period of time in
order to obtain more data.
3. Measurement of sustainability practices according to SDGs using content analysis so that
it contains a subjective element. Researchers use peer review to minimize the element of
subjectivity, so that further research is suggested to conduct peer review, focus group
discussion, and gradual measurement to minimize the element of subjectivity.
4. This study used the measurement of SDGs mapping with GRI indicator 4.0 because the
majority of samples used it, so the next research can use the most recent indicator of GRI
Standard.
5. It is recommended to enrich the control variables used in the study.

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