Proceedings of the 1st International Conference on Economics Engineering and Social Science, InCEESS 2020, 17-18 July, Bekasi, Indonesia

Research Article

Sustainability Practices and Financial Performance: Evidence from Islamic Banking in Indonesia

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  • @INPROCEEDINGS{10.4108/eai.17-7-2020.2302993,
        author={Angga Septian Prayoga and Dodik  Siswantoro},
        title={Sustainability Practices and Financial Performance: Evidence from Islamic Banking in Indonesia},
        proceedings={Proceedings of the 1st International Conference on Economics Engineering and Social Science, InCEESS 2020, 17-18 July, Bekasi, Indonesia},
        publisher={EAI},
        proceedings_a={INCEESS},
        year={2021},
        month={1},
        keywords={sustainability financial performance islamic banking},
        doi={10.4108/eai.17-7-2020.2302993}
    }
    
  • Angga Septian Prayoga
    Dodik Siswantoro
    Year: 2021
    Sustainability Practices and Financial Performance: Evidence from Islamic Banking in Indonesia
    INCEESS
    EAI
    DOI: 10.4108/eai.17-7-2020.2302993
Angga Septian Prayoga1,*, Dodik Siswantoro1
  • 1: Department of Accounting, Faculty of Economics and Business, Universitas Indonesia, Depok, Jawa Barat, 16424, Indonesia
*Contact email: angga.septian81@ui.ac.id

Abstract

In Islamic banking, sustainability practices and its reporting are very low, due to limited literature and framework for measuring sustainability. This study measures the level of sustainability practices (economic, environmental, and social) based on GRI (Global Reporting Initiative) items that are transformed with Maqasid Al-Sharia theory and investigate how they affect financial performance. Using content analysis techniques in annual and sustainability reports for period 2014 - 2018, the results indicate that there has been increasing sustainability practices in Islamic banking but this practice has a weak influence on financial performance. These results support an urgent need for appropriate sustainability guidelines for Islamic banking, especially in Indonesia.