Social Disclosure in Sustainability Report: A Legitimacy Theory Approach and Social Disclosure as a Public Trust Building Strategy

Abstract

Sustainability reporting serves not only as a tool to communicate a company’s performance in economic, social, and environmental aspects but also as a strategic means to obtain and maintain social legitimacy from stakeholders and the public. By analyzing sustainability reports of selected companies listed on the Indonesia Stock Exchange (IDX) under the LQ45 index during the 2021–2023 period, the study assesses the extent of social disclosure based on the Global Reporting Initiative (GRI) Standards. The findings reveal that sustainability reports play a strategic role in building public trust, yet companies still face challenges in implementation, including limited data accuracy, resource constraints, ineffective communication, and low stakeholder engagement. These results highlight that successful social disclosure strongly depends on a company’s commitment to transparency, accountability, and the integration of sustainability principles into its business operations.