FROM GREEN STRATEGY TO PERFORMANCE: THE MODERATING ROLE OF SUSTAINABILITY REPORTING QUALITY

Authors

  • Lativa Universitas Trisakti
  • Etty Murwaningsari Universitas Trisakti
  • Juniati Gunawan Universitas Trisakti

DOI:

https://doi.org/10.18623/rvd.v23.n4.4519

Keywords:

Green Competitive Advantage, Green Innovation, Firm Performance, Sustainability Reporting Quality, Sustainability Strategy

Abstract

This study investigates the effects of green competitive advantage (GCA) and green innovation (GI) on company performance, with sustainability report quality (SRQ) serving as a moderating variable. Firm size and firm age are included as control variables to enhance empirical robustness. Using a quantitative approach, the study analyzes panel data from 248 manufacturing firms listed on the Indonesia Stock Exchange (IDX) during 2022–2023, yielding 496 firm-year observations. The hypotheses are tested using panel data regression and Moderated Regression Analysis (MRA). The findings reveal that GCA has a significant positive effect on company performance, whereas GI does not demonstrate a statistically significant direct impact. Furthermore, SRQ significantly strengthens the relationship between GCA and company performance but does not moderate the relationship between GI and performance. The primary contribution of this study lies in the refinement and extension of the SRQ construct by incorporating two additional dimensions—responsiveness and impact—which extend beyond conventional disclosure attributes such as accuracy and reliability. This enhanced SRQ framework allows for a more policy-relevant evaluation of whether sustainability reports not only comply with reporting standards but also meaningfully address stakeholder concerns and demonstrate tangible performance outcomes. From a policy perspective, the results suggest that sustainability reporting frameworks should emphasize report substance, stakeholder responsiveness, and measurable impact rather than focusing solely on disclosure volume or formal compliance. Strengthening SRQ can enhance the credibility of green strategies and increase their contribution to firm performance. Overall, the findings provide important implications for regulators, standard setters, and policymakers seeking to improve the effectiveness of sustainability disclosure regimes and promote performance-oriented sustainability practices in emerging markets.

References

ACCOUNTABILITY. AA1000 assurance standard (AA1000AS). London: Accountability, 2020. Available at: https://www.accountability.org/standards/aa1000-assurance-standard

AIELLO, F.; PUPO, V.; RICOTTA, F. Firm age, innovation, and productivity: Evidence from manufacturing firms. Journal of Business Research, v. 166, p. 114070, 2024. DOI: https://doi.org/10.1016/j.jbusres.2023.114070

ALAM, M. M.; ISLAM, M. T. Green corporate image and firm performance: Evidence from emerging markets. Sustainability, v. 13, n. 9, p. 4952, 2021. DOI: https://doi.org/10.3390/su13094952

ANDRIES, P.; STEPHAN, U. Environmental innovation and firm performance: How firm size and age matter. Small Business Economics, v. 52, n. 4, p. 985–1004, 2019. DOI: https://doi.org/10.1007/s11187-017-9955-0

ASTAWAN, I. K. B.; RIBEK, P. K.; IMBAYANI, I. G. A.; LANDRA, N. The mediating role of trust in the relationship between information quality, corporate image, and loyalty. International Journal of Applied Business & International Management, v. 10, n. 3, p. 389–406, 2025. DOI: https://doi.org/10.32535/ijabim.v10i3.4099

ASTUTI, D.; SETYANINGRUM, D.; WAHYUNI, E. T. Green competitive advantage and firm performance: Evidence from manufacturing firms. Journal of Cleaner Production, v. 388, p. 135994, 2023. DOI: https://doi.org/10.1016/j.jclepro.2023.135994

AYINADDIS, S. G. Green innovation and firm competitiveness: The mediating role of sustainability orientation. Business Strategy and the Environment, v. 32, n. 3, p. 1756–1770, 2023. DOI: https://doi.org/10.1002/bse.3231

BAAH, C.; JIN, Z.; TANG, L.; LI, Z. Green competitive advantage and firm performance: The role of green innovation capability. Technological Forecasting and Social Change, v. 193, p. 122620, 2024. DOI: https://doi.org/10.1016/j.techfore.2023.122620

BARNEY, J. Firm resources and sustained competitive advantage. Journal of Management, v. 17, n. 1, p. 99–120, 1991. DOI: https://doi.org/10.1177/014920639101700108

BECKER, J. Green innovation and firm performance: A dynamic capability perspective. Journal of Environmental Management, v. 337, p. 117706, 2023. DOI: https://doi.org/10.1016/j.jenvman.2023.117706

BEHMIRI, N. B.; REBELO, J. F.; GOUVEIA, S.; ANTÓNIO, P. Firm characteristics and export performance in Portuguese wine firms. International Journal of Wine Business Research, v. 31, n. 3, p. 419–440, 2019. DOI: https://doi.org/10.1108/IJWBR-07-2018-0032

BENEVENE, P.; BUONOMO, I. The relationship between human resource management and organizational performance. Frontiers in Psychology, v. 11, p. 589135, 2020. DOI: https://doi.org/10.3389/fpsyg.2020.589135

BINTARA, R.; RUDYANTO, A.; SIREGAR, S. V. Environmental strategy, competitive advantage, and firm performance. Asian Journal of Business Ethics, v. 12, n. 2, p. 267–289, 2023. DOI: https://doi.org/10.1007/s13520-023-00159-7

BUALLAY, A. Sustainability reporting and firm performance. Journal of Applied Accounting Research, v. 21, n. 3, p. 597–620, 2020. DOI: https://doi.org/10.1108/JAAR-06-2018-0085

CHATTERJEE, S.; RANA, N. P.; DWIVEDI, Y. K. Firm age and performance: A meta-analysis. Journal of Business Research, v. 144, p. 973–985, 2022. DOI: https://doi.org/10.1016/j.jbusres.2022.02.032

CHEN, Y. S. The driver of green innovation and green image. Journal of Business Ethics, v. 81, n. 3, p. 531–543, 2008. DOI: https://doi.org/10.1007/s10551-007-9522-1

CHEN, Y. S.; CAO, C. Green competitive advantage and firm performance. Business Strategy and the Environment, v. 32, n. 1, p. 1–14, 2023. DOI: https://doi.org/10.1002/bse.3154

CHOUAIBI, S.; CHOUAIBI, J.; ROSSI, M. ESG and firm performance. Corporate Social Responsibility and Environmental Management, v. 29, n. 5, p. 1353–1369, 2022. DOI: https://doi.org/10.1002/csr.2279

DO, B.; NGUYEN, N. Green competitive advantage and firm performance. Journal of Cleaner Production, v. 260, p. 121012, 2020. DOI: https://doi.org/10.1016/j.jclepro.2020.121012

ELORANTA, V.; TURUNEN, T. Seeking competitive advantage with service infusion. Industrial Marketing Management, v. 47, p. 59–69, 2015. DOI: https://doi.org/10.1016/j.indmarman.2015.02.001

FARMANESH, P.; ZARGAR, S. M.; GOHARI, S. Green IT adoption barriers. Information Systems Frontiers, advance online publication, 2025. DOI: https://doi.org/10.1007/s10796-024-10456-3

FREEMAN, R. E. Strategic management: A stakeholder approach. Boston: Pitman, 1984.

GARG, P.; GUPTA, B.; MEHTA, R. Green IT and e-waste management. Technological Forecasting and Social Change, v. 186, p. 122146, 2023. DOI: https://doi.org/10.1016/j.techfore.2022.122146

GLOBAL REPORTING INITIATIVE (GRI). GRI sustainability reporting standards. Amsterdam: Global Reporting Initiative, 2021.

GOETHALS, F.; ZIEGELMAYER, J. Green investment and firm value. Journal of Sustainable Finance & Investment, v. 14, n. 2, p. 453–472, 2024. DOI: https://doi.org/10.1080/20430795.2023.2190023

GUJARATI, D. N. Basic econometrics. 5. ed. New York: McGraw-Hill, 2009.

HAFEEZ, M.; LI, X.; YANG, H. Green corporate image and investor behavior. Journal of Cleaner Production, v. 418, p. 138118, 2024. DOI: https://doi.org/10.1016/j.jclepro.2023.138118

HANG, M.; GEYER-KLINGEBERG, J.; RATHGEBER, A. W. Sustainability and firm performance. Journal of Business Economics, v. 92, n. 6, p. 877–918, 2022. DOI: https://doi.org/10.1007/s11573-021-01074-1

HONG, T. L.; HUEI, L. Y.; MATHUR, G.; JAYARAMAN, M.; QIXING, M.; AALAM, M. F. B. Z.; HUIQI, M. The role of social media platforms in boosting business performance. Advances in Global Economics and Business Journal, v. 6, n. 2, p. 132–146, 2025. DOI: https://doi.org/10.51748/agebj.v6i2.123

HUANG, C. L.; KUNG, F. H. Environmental consciousness and intellectual capital management: Evidence from Taiwan’s manufacturing industry. Management Decision, v. 49, n. 9, p. 1405–1425, 2011. DOI: https://doi.org/10.1108/00251741111173916

KARABULUT, T.; HATIPOĞLU, M. Green innovation and firm performance. Business Strategy and the Environment, v. 29, n. 8, p. 3487–3503, 2020. DOI: https://doi.org/10.1002/bse.2599

KANG, S.; NA, Y. K. Effects of strategy characteristics for sustainable competitive advantage in sharing economy businesses on creating shared value and performance. Sustainability, v. 12, n. 4, p. 1397, 2020. DOI: https://doi.org/10.3390/su12041397

LEE, J. L. M.; LIU, V.; CHENG, C. Effect of green advertising attitude on collectivist consumer behavior: An integrative approach. Asia Pacific Journal of Marketing and Logistics, v. 35, n. 12, p. 3008–3031, 2023. DOI: https://doi.org/10.1108/APJML-05-2022-0437

LÓPEZ-LÓPEZ, E.; BAJORATH, J.; MEDINA-FRANCO, J. L. Informatics for chemistry, biology, and biomedical sciences. Journal of Chemical Information and Modeling, v. 61, n. 1, p. 26–35, 2020. DOI: https://doi.org/10.1021/acs.jcim.0c01301

LEONIDOU, L. C.; KATSIKEAS, C. S.; MORGAN, N. A. Greening the marketing mix. Journal of International Marketing, v. 19, n. 2, p. 1–25, 2011. DOI: https://doi.org/10.1509/jimk.19.2.1

MAGA, A. L; KAIWAI, H. Z.; PUTRI, M. E. Analysis of the performance of the agribusiness subsystem in the development of horticultural commodities in Kehiran Village. Asia Pacific Journal of Management and Education, v. 8, n. 3, p. 407–428, 2025. DOI: https://doi.org/10.32535/apjme.v8i3.4125

MAHDI, O. R.; NASSAR, I. A. The business model of sustainable competitive advantage through strategic leadership capabilities and knowledge management processes to overcome COVID-19 pandemic. Sustainability, v. 13, n. 17, p. 9891, 2021. DOI: https://doi.org/10.3390/su13179891

MUISYO, P. K.; QIN, S.; HO, T. H.; JULIUS, M. M. The effect of green HRM practices on green competitive advantage of manufacturing firms. Journal of Manufacturing Technology Management, v. 33, n. 1, p. 22–40, 2022. DOI: https://doi.org/10.1108/JMTM-10-2020-0388

NG, W. C.; YUSOF, R.; MAZLAN, N. A. B.; OH, K. X.; ONG, J. W.; ONG, S. Y.; KEE, D. M. H. Unlocking satisfaction: Discovering the drivers of customer satisfaction on Taobao. Advances in Global Economics and Business Journal, v. 6, n. 2, p. 180–195, 2025. DOI: https://doi.org/10.32535/agebj.v6i2.4278

NASIR, A.; ZAKARIA, N.; DO, N.; VELASQUEZ, S. The impact of knowledge management on sustainable performance with mediation effect of green innovation in Malaysian SMEs. VINE Journal of Information and Knowledge Management Systems, 2024. DOI: https://doi.org/10.1108/VJIKMS-02-2024-006

NOVITASARI, D.; AGUSTIA, D. Green innovation and firm value. Sustainability, v. 14, n. 5, p. 2945, 2022. DOI: https://doi.org/10.3390/su14052945

OWARE, K. M.; WORAE, T. Sustainability reporting quality and firm performance. Journal of Cleaner Production, v. 385, p. 135646, 2023. DOI: https://doi.org/10.1016/j.jclepro.2022.135646

ÖZGÜL, B.; ZEHİR, C. How managers’ green transformational leadership affects a firm’s environmental strategy, green innovation, and performance: The moderating impact of differentiation strategy. Sustainability (Switzerland), v. 15, n. 4, 2023. DOI: https://doi.org/10.3390/su15043597

PAN, C.; JIANG, Y.; WANG, M.; XU, S.; XU, M.; DONG, Y. How can agricultural corporate build sustainable competitive advantage through green intellectual capital? A new environmental management approach to green agriculture. International Journal of Environmental Research and Public Health, v. 18, n. 15, 2021. DOI: https://doi.org/10.3390/ijerph18157900

PERMATASARI, D.; RUDYANTO, A.; SIREGAR, S. V. Sustainability reporting and firm performance. Asian Journal of Accounting Research, v. 5, n. 1, p. 1–15, 2020. DOI: https://doi.org/10.1108/AJAR-09-2019-0072

PÉREZ-LÓPEZ, D.; MORENO-ROMERO, A.; BARKEMEYER, R. Stakeholder reporting and legitimacy. Journal of Business Ethics, v. 130, n. 1, p. 207–221, 2015. DOI: https://doi.org/10.1007/s10551-014-2191-2

PORTER, M. E. Technology and competitive advantage. Journal of Business Strategy, v. 5, n. 3, p. 60–78, 1985. DOI: https://doi.org/10.1108/eb039075

PURBIYATI, Y. S.; ANDREW, R. The moderating role of digital transformation on the influence of workplace spirituality and sustainable leadership on school organizational performance. International Journal of Applied Business & International Management, v. 10, n. 3, p. 445–463, 2025. DOI: https://doi.org/10.32535/ijabim.v10i3.4237

QING, L.; CHUN, D.; DAGESTANI, A. A.; LI, P. Does proactive green technology innovation improve financial performance? Evidence from listed companies with semiconductor concepts stock in China. Sustainability (Switzerland), v. 14, n. 8, 2022. DOI: https://doi.org/10.3390/su14084600

RAHMAN, M. M.; SOBHAN, R.; HASAN, M. Sustainability resources and firm performance. Sustainability, v. 16, n. 1, p. 321, 2024. DOI: https://doi.org/10.3390/su16010321

RAMANATHAN, S.; ISAKSSON, R. Sustainability reporting as a 21st century problem statement: Using a quality lens to understand and analyse the challenges. TQM Journal, v. 35, n. 5, p. 1310–1328, 2023. DOI: https://doi.org/10.1108/TQM-01-2022-0035

RUDYANTO, A.; SIREGAR, S. V. The effect of sustainability reporting quality. International Journal of Ethics and Systems, v. 34, n. 3, p. 389–403, 2018. DOI: https://doi.org/10.1108/IJOES-03-2018-0037

SEBRINA, N.; TAQWA, S.; AFRIYENTI, M.; SEPTIARI, D. Analysis of sustainability reporting quality and corporate social responsibility on companies listed on the Indonesia Stock Exchange. Cogent Business and Management, v. 10, n. 1, 2023. DOI: https://doi.org/10.1080/23311975.2022.2157975

ŠIMUNOVIĆ, D.; MURTARELLI, G.; ROMENTI, S. Sustainability data distortions: The use of visual impression management techniques in corporate sustainability reporting. Journal of Communication Management, v. 28, n. 1, p. 93–109, 2024. DOI: https://doi.org/10.1108/JCOM-12-2022-0134

SINGH, S.; SHARMA, D. Green IT adoption in emerging economies. Journal of Cleaner Production, v. 393, p. 136307, 2023. DOI: https://doi.org/10.1016/j.jclepro.2023.136307

WERNERFELT, B. A resource-based view of the firm. Strategic Management Journal, v. 5, n. 2, p. 171–180, 1984. DOI: https://doi.org/10.1002/smj.4250050207

YUSUF, W.; JORDAN, M. M.; SAITGALINA, M.; JONES, P. A. Accessibility of state financial information: Analysis of state MD&A size, readability, and timeliness. Public Administration Quarterly, v. 47, n. 4, p. 429–455, 2023. DOI: https://doi.org/10.37808/paq.47.4.2

ZAMEER, H.; YASMEEN, H.; WANG, Y.; AHMED, Z. Green image and competitive advantage. Corporate Social Responsibility and Environmental Management, v. 31, n. 1, p. 112–126, 2024. DOI: https://doi.org/10.1002/csr.2601

ZIHAN, L.; QIANG, W.; JUN, Z. Stakeholder pressure and green technology adoption. Sustainability, v. 16, n. 2, p. 765, 2024. DOI: https://doi.org/10.3390/su16020765

Downloads

Published

2026-02-10

How to Cite

Lativa, Murwaningsari, E., & Gunawan, J. (2026). FROM GREEN STRATEGY TO PERFORMANCE: THE MODERATING ROLE OF SUSTAINABILITY REPORTING QUALITY. Veredas Do Direito, 23, e234519. https://doi.org/10.18623/rvd.v23.n4.4519

Issue

Vol. 23 (2026): Veredas do Direito, v. 23, 2026

Section

Articles

License

I (we) submit this article which is original and unpublished, of my (our) own authorship, to the evaluation of the Veredas do Direito Journal, and agree that the related copyrights will become exclusive property of the Journal, being prohibited any partial or total copy in any other part or other printed or online communication vehicle dissociated from the Veredas do Direito Journal, without the necessary and prior authorization that should be requested in writing to Editor in Chief. I (we) also declare that there is no conflict of interest between the articles theme, the author (s) and enterprises, institutions or individuals.

I (we) recognize that the Veredas do Direito Journal is licensed under a CREATIVE COMMONS LICENSE.

 

Licença Creative Commons Attribution 3.0