How does environmental, social, governance disclosure and political connection performance affect firm value? An empirical study in Singapore

Hardiningsih, Pancawati; Srimindarti, Ceacilia; Lisiantara, Gregorius Anggana; Kartika, Andi Article How does environmental, social, governance disclosure and political connection performance affect firm value? An empirical study in Singapore Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Hardiningsih, Pancawati; Srimindarti, Ceacilia; Lisiantara, Gregorius Anggana; Kartika, Andi (2024) : How does environmental, social, governance disclosure and political connection performance affect firm value? An empirical study in Singapore, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 11, Iss. 1, pp. 1-19, https://doi.org/10.1080/23311975.2024.2377764 This Version is available at: https://hdl.handle.net/10419/326430 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Cogent Business & Management ISSN: 2331-1975 (Online) Journal homepage: www.tandfonline.com/journals/oabm20 How does environmental, social, governance disclosure and political connection performance affect firm value? An empirical study in Singapore Pancawati Hardiningsih, Ceacilia Srimindarti, Gregorius Anggana Lisiantara & Andi Kartika To cite this article: Pancawati Hardiningsih, Ceacilia Srimindarti, Gregorius Anggana Lisiantara & Andi Kartika (2024) How does environmental, social, governance disclosure and political connection performance affect firm value? An empirical study in Singapore, Cogent Business & Management, 11:1, 2377764, DOI: 10.1080/23311975.2024.2377764 To link to this article: https://doi.org/10.1080/23311975.2024.2377764 © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group Published online: 15 Jul 2024. Submit your article to this journal Article views: 3138 View related articles View Crossmark data Citing articles: 4 View citing articles Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=oabm20 Accounting, corporAte governAnce & Business ethics | reseArch Article Cogent Business & ManageMent 2024, VoL. 11, no. 1, 2377764 How does environmental, social, governance disclosure and political connection performance affect firm value? An empirical study in Singapore pancawati hardiningsih , ceacilia srimindarti , gregorius Anggana lisiantara and Andi Kartika Department of accounting, Faculty of economics and Business, universitas stikubank, semarang, indonesia ABSTRACT this research aims to examine environmental performance disclosure, social performance disclosure, governance performance disclosure, and political linkages in increasing firm value in singapore. the research method uses a quantitative descriptive approach using secondary data. the population is all companies listed on the singapore stock exchange with a sample size of 87 companies and the research period is between 2018 and 2021. the hypothesis testing analysis technique uses panel data regression. the findings of this study indicate that disclosure of political ties, disclosure of governance performance, and disclosure of environmental performance all increase firm value. however, firm value is not influenced by social performance disclosure. this research looks at how political connections and firm value are influenced by disclosure of environmental performance, social performance, governance performance and other factors. to increase business value, it is important to disclose environmental performance, social performance, governance performance and political relationships, as this research shows. the implications of this research show that sustainability report disclosure provides a good signal that can increase firm value. 1. Introduction the previous ten years have seen a trade war between the united states and china, which has had a significant impact on the globalization of the economy. the impact of economic globalization is that business competition becomes very tight, and investment growth slows down, as a result, share price movements become very uncertain. this condition is reflected in the significant drop in stock and corporate bond prices, a sharp decline in economic output in the first half of this year Zimon et al. (2023). it consequently affects the value of businesses listed on the indonesian stock exchange. the corporate value is crucial because company value shows the conditions the corporate has achieved in relation to public trust in the company since the company was founded until now. the firmvalue also shows the company’s prospects and reflects the total assets owned by the company. For business owners, having a high company value is the ultimate goal as it signifies their well-being. © 2024 the author(s). Published by informa uK Limited, trading as taylor & Francis group CONTACT Pancawati Hardiningsih [email protected] Department of accounting, Faculty of economics and Business, universitas stikubank, semarang, indonesia. https://doi.org/10.1080/23311975.2024.2377764 this is an open access article distributed under the terms of the Creative Commons attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. the terms on which this article has been published allow the posting of the accepted Manuscript in a repository by the author(s) or with their consent. ARTICLE HISTORY received 12 october 2023 revised 24 May 2024 Accepted 19 June 2024 KEYWORDS environmental performance; social performance; governance performance; sustainability report disclosure; political connection; firm value REVIEWING EDITOR Dr collins ntim, Accounting, southampton Business school, university of southampton, southampton, hampshire, united Kingdom of great Britain and northern ireland SUBJECTS Business, Management and Accounting; Finance; industry & industrial studies JEL CLASSIFICATION g32; M40; M48 2 p. hArDiningsih etAl. conditions of tight competition and developments in stock prices on the stock exchange require investors to be more careful with a high level of astuteness in understanding and observing published financial reports. A corporation that is focused on business sustainability has a high and low value that is based on both financial and non-financial performance, such as the effect of operations on the environment and society. therefore, companies must maintain a balance in the environmental and social ecosystem and implement effective corporate governance (ng & rezaee, 2015). this term is often referred to as environmental, social, governance (esg) sustainability. this means that the entity must be able to maintain the balance of the industrial ecosystem investors starting to shift their main set towards business sustainability will have a long-term perspective that the entity’s existence is not only profit oriented but also how to overcome the impacts arising from operations as a step to meet stakeholder demands (lambert et al., 2007). Business sustainability is an effort made by the company to minimize negative impacts on the environment, society, both the global economy and local communities. therefore, the concept of sustainability business is how to build a community in the fields of economic, social and ecological goals must be balanced (székely & Knirsch (2005). in the context of stakeholder theory, management focuses on business activities that result in non-financial voluntary activities that lead to the achievement of sustainability performance. this esg activity is of concern to all stakeholders (Jensen, 2001). especially in developing countries that are moving towards advanced status, esg activities are still voluntary, but since the decade of 2020 this activity has begun to become mandatory. in the meantime, signal theory clarifies that the information’s owner, the business, offers a signal in the form of data that represents the state of the business which is useful for investors (spence, 1973). this theory attempts to overcome the problem of information asymmetry, when stakeholders have superior information about one company compared to other companies (ross, 1977). oware & Worae (2023) use applicable signaling theory to describe the effect of corporate performance on indian reporting methods and frameworks for sustainability reporting. Meanwhile, suttipun (2023) uses signal theory to reduce information asymmetry gaps, as well as conflicts of interest between corporate and their stakeholders, especially creditors related to the environmental, social and governance performance of companies in thailand. previous research conducted by Alonso-Almeida etal. (2018) and Wang & Jiang (2019) show that sustainability reporting tends to enhance performance since it gives businesses a competitive edge. this research attempts to consider what each and every stakeholder needs through sustainability report disclosure and political connections as non-financial (esg) information that can influence firm value. this study contributes to the existing literature, namely; (1) help increase understanding of how esg (environmental, social and governance) disclosures can impact company value. (2) help identify the best or most effective esg disclosure practices among companies in increasing company value. (3) help develop policy recommendations to improve esg disclosure by identifying the obstacles companies face and how to overcome these obstacles. (4) increasing corporate transparency and accountability by disclosing more esg information to investors and other stakeholders. (5) encourage sustainable investment through effective esg disclosure, thereby helping investors invest in companies that have good esg performance. thus, it is hoped that the results of this research can convince companies and policy makers that disclosure of sustainability reports and political connections is a value creator and conveys positive signals that increase company value. the importance of the concept of sustainability is explained by the fact that companies must be able to minimize the effects of their actions on the environment and do not need to avoid waste. the companies must not spend their resource reserves to maintain environmental ecosystems, increase material and energy efficiency for future generations, but companies also demand high empathy for social aspects (Al-tuwaijri et al., 2004). previous research conducted by Jadiyappa etal. (2019) and Manchiraju & rajgopal (2017) who examine mandatory reporting and business effectiveness, and also Arena et al. (2018) and goel (2018) who examine the mandatory reporting of gri sustainability disclosures. other research was conducted by oware & Worae (2023) who conducted research in the mandatory reporting environment in india on tobin’s q is used to measure the impact of sustainability reporting disclosures (environmental, social, governance) and report formats on business performance. Meanwhile, this study examines cogent Business & MAnAgeMent 3 environmental, social, governance report disclosure (sustainability report Disclosure) and political connections in increasing firm value. 2. Background southeast Asian companies are still low in implementing sustainability reporting. singapore, with its limited area compared to other southeast Asian countries, also shows that companies’ awareness of maintaining esg activities is still low. research on business sustainability information on non-financial dimensions in the context of firm value in developing countries is still limited. this can be seen from several research results on the reflection of esg on firm value showing that the results are still mixed. high corporate value is also produced by companies that always maintain environmental and social effects that have an impact on company operations. companies need to protect the environment because the company’s operations are located in residential areas or even side by side in biodiversity areas where the animals and plants in it must be protected. such conditions require companies to be able to maintain the balance of ecosystem habitats. research related to environmental impacts arising from company operations shows mixed results. research findings from plumlee et al. (2015) show the impact of environmental disclosure on the worth of a company. nevertheless, rinsman and prasetyo’s investigation (2020) did not uncover this effect. these results indicate that disclosure of environmental information has not been fully taken into consideration by some investors in making decisions to encourage increased company value. When a firm discloses its environmental performance, it indicates to potential investors that it has done well in this field. the company believes that this will raise the company’s worth. Furthermore, entities also need to build an image, enhance a positive image and strengthen the company’s reputation among the general public. these efforts were made to get the attention of the public. this action can be done through corporate social responsibility (csr) activities. through csr activities, of course, there are many benefits for stakeholders, this will result in the value of the company being raised. this situation can open up new cooperation opportunities between the company and other parties. social activities can be done by involving employees directly, seeing the needs of the surrounding community, and of course needing to prepare a company budget. the forms of corporate social responsibility include responsibilities to employees, consumers, the environment, shareholders, and the community and creditors. in connection with carrying out these activities, the company requires funding in order to carry out these social activities, so that the reported profit for the current year will be lower. however, in the long term these activities can minimize legal/fiduciary claims. previous research related to the disclosure of social responsibility with firm value was conducted by li et al. (2017; Jitmaneeroj (2018) showed positive results. Different results were presented by othman et al. (2009) found demonstrated the disclosure of social responsibility has no impact on firm value. the existence of social responsibility makes the company bound to the community, this will happen if the company gets a loss as a result of bad decisions or failed products, then the situation is not only detrimental to the company financially but also socially. investors need quality financial statement information, because adequate information can reduce information uncertainty. Accurate and adequate information can be in the form of financial information and non-financial information. Financial information can be obtained in the financial report (annual report) while non-financial information can be obtained from the sustainability report (sustainability report). these two reports will provide complete information to investors in estimating business risk in the long term. When investors obtain financial information and non-financial information on a limited scale, as compensation, investors demand a higher rate of return because investors assume a relatively large uncertainty (Bhattacharya et al., 2012). one important aspect to reduce information asymmetry is to implement effective corporate governance (cg). the purpose of cg is internal control and oversight of strategic policies to create added value for all stakeholders (Monks, 2004). cg also provides complete information so that management and investors have the same relative quality of information. studies related to cg on firm value show mixed results. Findings by Jallo et al. (2017), gosal et al. (2018) and tunpornchai & hensawang (2018) found that cg has an effect on firm value. coversely, thought According 4 p. hArDiningsih etAl. to shakir (2008), governance decreases the firm value. the varied results of this study suggest that there are more factors that affect how corporate governance affects business value. events in politics have a direct impact on a nation’s stability and economic growth. the political relationship of the company provides benefits between the two parties, namely the government and the company. the purpose of politics is to formulate public policies, including for the benefit of the business world, and the business world can support a country’s politics in the form of funding. Funding from political parties is not enough only from the contributions of their party members, but parties also need other sources of funding from contributions from companies or individuals that also involve transactional agreements. reciprocity for donors can take the form of political lobbying, bidding for projects or policies that benefit the company or individual concerned. however, the existence of political relations can also threaten the firm value. shleifer & vishny (1994) state that firms with political ties can influence firm value, distort incentives, place wrong investments, and increase levels of corruption. research chen etal. (2010) found that analysts’ predictions will be less accurate if the company has political relations when in contrast to businesses without any political ties. According to goldman et al. (2006), political ties have an impact on corporate value. political links to elected governors boost the value of a corporation, as demonstrated by Do et al. (2012). the goal of this study is to address the issue of how to build a non-financial information model that can express an increase in firm value. in Asia, including singapore, reports on sustainability are beginning to appear more frequently. and is very interesting to research. Furthermore, as stakeholder demands grow stronger, businesses are compelled to offer responsible, transparent information as well as sound corporate governance procedures. this research is expected to provide a theoretical contribution in the field of management accounting, especially related to environmental accounting and social accounting as a counterweight for companies in perfecting guidelines for determining a more accurate cost analysis of products from environmental impacts caused by company activities. this research is expected to provide information for investors in making investment decisions by considering long-term non-financial performance to see the impact of increasing firm value. Furthermore, management is anticipated to use this research in producing quality non-financial performance by considering the importance of assessing environmental and social interactions in light of the environmental costs and benefits to minimize environmental problems encountered and improve management efficiency. this study is anticipated to provide input for regulators in determining the direction of practices/policies related to environmental impacts, such as demanding that companies maintain a balance/conservation of the natural surroundings and demanding that companies be more transparent about what they do to the environment and social actions. 3.Theoritical literature review 3.1. Accounting information disclosure theory the theory of accounting information disclosure explains the principles and reasons for conveying financial and non-financial information by companies to interested parties. this theory aims to determine what information should be disclosed, to whom the information should be disclosed, and how the information should be disclosed. As stated by valletta (2005), it is hoped that the more transparent the information presented by a company coupled with the increasingly realistic implementation of good governance will increase business success in the business world on an ongoing basis, it can also be used to understand business in a company. Accounting information disclosure theory plays an important role in ensuring that companies provide relevant and reliable information to stakeholders. By understanding the theories and factors that influence information disclosure, investors, creditors, and other interested parties can make more informed economic decisions. Wallace & naser (1995) stated that financial disclosure is an abstract concept and cannot be measured directly. As a result, to assess the quality of disclosure in Financial reports, certain measuring instruments are needed, for example an index, so that the disclosure of a Financial report can be compared with the disclosure of other Financial reports. cogent Business & MAnAgeMent 5 3.2. Agency theory dan signaling theory the link that exists between business owners and management as agents is explained by agency theory as principals (Jensen & Meckling, 1976). the person who directs another party, the agent, to handle all tasks on his behalf is known as the principal. According to this theory there is a separation between agent control, which has direct access to company data, and principals (nuswantara et al., 2023). Managers as agents are given the task of carrying out company operations by the owner (principal) to increase company value or shareholder prosperity. thus, the contribution of agency theory is the main solution in this research. Apart from agency theory, this research also uses signaling theory. this theory can be applied to describe the impact of sustainability report disclosure and political connection performance on company value (prayogo et al., 2023). healy & palepu (2001) in their research used signaling theory to examine company disclosure 3.3. Stakeholder theory According to the stakeholder hypothesis (Freeman & Mcvea, 2001), the corporation is accountable to certain groups of people. the idea that businesses are accountable to stakeholders as well as shareholders has been further strengthened by the rise of stakeholder theory as the prevailing paradigm. companies must engage with stakeholders by taking into account their requirements and wishes, particularly those of people who have influence over the resources that may be employed for operational operations. of the business, including its personnel, the items it sells, and other resources. Management of the firm takes stakeholder groups into account when deciding whether to disclose or not to disclose information in corporate reports. stakeholder theory’s primary goal is to aid firm management in maximizing the value created as a consequence of actions undertaken and reducing potential stakeholder losses. some important stakeholders who can help the company to achieve maximum profit and survive to this day are the community or consumers. Without the community or consumers, of course the products offered by the company will not be sold, causing bankruptcy. society or consumers can be said to be the controller of the company. When key financial resources for the business are under the hands of stakeholders, the company will act in a way that satisfies the wishes of stakeholders, in order to achieve maximum profit and survive in the midst of increasingly fierce business competition for the company. the tendency that is observed in singapore has seen an annual increase in the number of businesses disclosing reports on sustainability. this demonstrates that the business is already more concerned than usual about sustainability in the economic, social, and environmental spheres. companies that provide sustainability reports do so in order to demonstrate to stakeholders their commitment to social and environmental concerns, to be transparent, and to get feedback on how well they have handled stakeholder requests for information. 4. Reference study evidence and hypotheses development 4.1. The effect of disclosure of environmental performance on firm value the environmental aspect in the sustainability report explains how the form of corporate responsibility in overcoming problems in the environment around the company operates. stakeholder theory describes to whom the company is responsible (Freeman & Mcvea, 2001), one of which is stakeholders related to the environment (community, environmental activists, consumers). this needs to be disclosed by the company as information to its stakeholders how the company’s responsibility in overcoming environmental problems around the company operates. companies that publicizing the company’s environmental performance can enhance its standing in the community. A positive reputation in the community will provide the business a competitive edge. the environmental performance sustainability report shows that stakeholders feel the need for information on how the company deals with the environment that has an impact on the surrounding community, including recycling the generated waste. pumlee et al. (2015) and iqbal etal. (2019) show that the disclosure of environmental dimensions has an effect on firm 6 p. hArDiningsih etAl. value. environmental disclosures made by the company will give a positive signal to investors where the company has carried out environmental performance well and has an advantageous effect on the company’s worth. h1: environmental performance disclosure enhances the value of a company. 4.2. The effect of disclosure of social performance on firm value the term ‘social performance’ refers to performance facets including society, basic human freedoms and consequent commodities. stakeholder opinions of the company’s handling of the local human resources will change as a result of the sustainability report’s disclosure of the social performance components. Businesses need trustworthy, competitive, innovative, and efficient human resources to conduct their operations. the corporation uses the disclosure of its social performance to entice stakeholders to work with it. in order to manage the firm’s assets, the organization requires trustworthy, competitive, innovative, and effective human resources on the one hand, and stakeholders’ welfare on the other. the business anticipates that its assets will yield high production from its people resources, and in exchange, it will pay commensurate wages. According to research findings by rais etal. (2020), the impact of corporate social responsibility on increasing firm value. h2: the value of the company is positively impacted by social performance disclosure. 4.3. The influence of disclosure of governance capabilities on corporate value corporate governance (cg) is a structure created to professionally guide a company’s management based on the values of openness, responsibility, accountability, independence, justice, and equality. An effective cg implementation will guide ethical corporate conduct, assuring the management of a supportive and encouraging work environment, being accountable to the market and community, as well as delivering a healthy and sustainable financial performance. one of the cg roles carried out by independent commissioners as parties who are not connected with the directors or company owners, who do not have an interest in the company can more easily carry out their duties to supervise. the audit committee’s function as an internal auditing body for the implementation of accounting records and reporting follows applicable accounting standards and prevents certain parties from committing fraudulent financial statements, resulting in the presentation of quality monetary statements and showing the company’s true financial position. A condition known as managerial ownership occurs when the management also holds company stock, or in other words, when the manager is a stakeholder in the business. the fact that a significant percentage of the company’s shares are held by managers indicates this predicament. Meanwhile, institutional ownership is share ownership by other institutions. the more institutional ownership there is (at least 10% of the company’s total shares), the more external oversight and control there is to rein in the opportunistic conduct of management. the existence of cg can overcome problems or limit management opportunities that lead to opportunistic behavior. the company strives so that the existing information can be distributed evenly and conveyed to parties with an interest in the company through an effective system of corporate governance. An independent audit committee, managerial ownership, and an independent board of commissioners is a step for the company in implementing corporate governance. companies that carry out governance activities are considered companies that provide adequate protection and transparency to investors, this will make the share price reflected increase so the firm value will also increase. corporate governance research on firm value was found by Jallo et al. (2017), gosal et al. (2018) and tunpornchai & hensawang (2018) found that governance has an impact on firm value. in light of the findings of the earlier study, the hypotheses in this study were formulated as follows: h3: Disclosure of governance performance has a positive effect on firm value cogent Business & MAnAgeMent 7 4.4. The influence of political connection on firm value companies classified as politically connected do so because they have some sort of relationship with politicians. through legislation, policies, and their execution, politicians—in this case, the government— have a say in deciding the extent of investor protection, followed by interest groups. entrepreneurs, institutional investors, and corporate insiders will work to influence lawmakers to provide the right degree of protection. corporate insider groups can use company assets to cover the costs of lobbying politicians, while other interest groups need to bear the costs of lobbying directly. if political connections are successful in reducing unjust economic rents that are levied against rival businesses and customers, this might boost the company’s worth (Faccio, 2006). however, if politicians and managers associated with those politicians eat all or the majority of the company’s value, shareholders will only receive a small portion of the value that is still accessible. research conducted by Maaloul etal. (2018) found that political ties increase the worth of a company. Based on these arguments, the hypotheses in this study are as follows: h4: political connection has a positive impact on company value 5. Research desaign 5.1. Sample and data collection the research sample was collected from manufacturing companies in the industrial sector listed on the singapore stock exchange between 2018 and 2020 with purposive sampling was the method employed for sample selection. We have observations of 87 manufacturing businesses conducted over a three year period from 689 manufacturing companies after filtering out data that is not registered and meets the requirements. the primary source of secondary data for environmental, social, governance, and firm value disclosures was the annual reports of corporations registered on the singapore stock exchange. secondary data information in this research includes sustainability reports, company annual reports, and financial performance of companies listed on the singapore exchange (sgX). this data can be accessed and obtained openly through Bloomberg services, so the data comes from a platform that is publicly available and has been published. therefore no further permission is required for its use in research efforts. the sample selection process is shown in table 1 below. 5.2. Operational and variable measurement Firm value is the study’s dependent variable. Firm value is a gauge of how well management has performed in previous operations and how likely they are to persuade shareholders in the future. the measurement of firm value uses the tobin’Q proxy (prayogo etal., 2023). the research’s independent variables include the environmental disclosure, social disclosure, and governance disclosure (esg). information about the effects of the company’s past, present, and future environmental management initiatives is known as environmental disclosure (campbell, 2004). social disclosure is a process used by companies to disclose information related to company activities and their influence on the social conditions of the community (chariri & ghozali, 2017). A system called disclosure of governance is intended to guide a company’s management in a professional manner by incorporating the values of independence, equality, Table 1. sample selection. Details observations initial sample manufaktur 689 Less: not preparing complete financial reports 587 Missing data 15 Final sample 87 14 p. hArDiningsih etAl. thereby increasing company value. the fourth finding shows that political connections have a positive impact on company value. this implies that a company’s worth will increase in direct proportion to its political connections, since investors will respond to it more favorably. support for political involvement between shareholders, high-ranking officials and the government is needed, because it has been proven to increase company value. this research was tested strongly using panel data regression. it is recommended that companies are required to make continuous reporting related to environmental, social and corporate governance disclosures in order to add positive signals and thereby increase firm value. this research provides a theoretical contribution by confirming that the variables used in previous research are relevant to this research (Alatawi et al., 2023; elmghaamez et al., 2023; ntim & soobaroyen, 2013; tran et al., 2021). even though the research results make an important contribution related to non-financial information, this research has limitations with a very small number of samples. this shows that company compliance in terms of disclosure of esg activities is still limited. the existence of a research object in singapore, makes the research results cannot be generalized to companies in other Asian countries. the study’s findings are only able to explain the limited liability company value information which is equal to 28.9 percent of non-financial information. social responsibility is closely related to the sustainability of the industry. companies need to increase social activities through social disclosure by adjusting the objectives of the development of sustainability reports that have been agreed by the united nations. Further research can conduct comparative studies between industrial sectors and between countries in examining disclosure of environmental, social and corporate governance responsibilities in non-financial companies, so as to enrich literacy and deepen analysis. Apart from that, future research also needs to pay attention to investor interest and employee involvement as well as control variables in order to strengthen their influence on company value, so that investors can obtain comprehensive information in their decision making. 8.The implication of the study 8.1. Theoritical contribution the results of this research support the theory of accounting information disclosure which explains the principles and reasons for conveying financial and non-financial information by companies to interested parties. the findings of this study are also in accordance with agency theory which states that the relationship that occurs between company management as the agent and the company owner as the principal is that the agent is instructed by the principal to handle all tasks on the principal’s behalf. the results of this study are also in accordance with signal theory which states that the company as the owner of the information provides a signal in the form of information that reflects the condition of the company which is useful for investors. likewise, the findings of this research are also in accordance with stakeholder theory argues that businesses should put more than just profits first, but must also provide benefits to stakeholders, so companies must carry out social and environmental responsibility activities with full sincerity. 8.2. Managerial implications companies in singapore must make continuous reporting related to environmental, social and corporate governance disclosures to provide a good signal to stakeholders and investors. Managers of companies in singapore must be aware that sustainability report disclosure and political connections provide good signals that can have an impact on increasing company value. good and profitable relationships must continue to be established through the implementation of environmental, social and corporate governance disclosure reporting obligations to provide information to stakeholders and investors. this information is necessary for companies in the singapore capital market. likewise, political connections between shareholders, high-ranking officials and the government are needed, because they are proven to increase firm value. cogent Business & MAnAgeMent 15 8.3. Policy implications companies operating in singapore in implementing sustainability reporting disclosures and political connections provide information to policy makers that this has an impact on increasing share prices. these findings further strengthen the statement of the need to disclose sustainability reports and political connections for companies in singapore. Disclosure of sustainability reports and political connections provides significant benefits to business performance and stakeholders, because it increases firm value. Authors’ contributions conceptualization: pancawati hardiningsih, ceacilia srimindarti. Data curation: pancawati hardiningsih, gregorius Anggana lisiantara, Andi Kartika. Formal analysis: pancawati hardiningsih, gregorius Anggana lisiantara. investigation: ceacilia srimindarti. Andi Kartika. Methodology: gregorius Anggana lisiantara, ceacilia srimindarti. project administration: pancawati hardiningsih, ceacilia srimindarti. validation: Andi Kartika, pancawati hardiningsih. visualization: Andi Kartika, gregorius Anggana lisiantara. Writing – original draft: ceacilia srimindarti, Andi Kartika. Writing – review & editing: pancawati hardiningsih, gregorius Anggana lisiantara. Authors’ declaration every author acknowledges that they are all responsible for the published research work in every way. Citation information citation details reference this page as: how does sustainability report pisclosure and political connection performance affecting firm value? An empirical study in singapore, pancawati hardiningsih, ceacilia srimindarti, gregorius Anggana lisiantara, Andi Kartika, cogent Business & Management (20 …), 10: ……. Disclosure statement the researcher and publisher of this work certify that there is no potential conflict of interest pertaining to social, political, cultural, economic, or religious. Funding Financial funding was provided to the author for the purpose of conducting research, writing, and/or publishing this article with agreement letter number: 005/DppMp/unisBAnK/KontrAK/-pn/v/202, university of stikubank. ORCID pancawati hardiningsih http://orcid.org/0000-0001-9992-3128 ceacilia srimindarti http://orcid.org/0000-0002-1067-205X Andi Kartika http://orcid.org/0000-0002-7650-3013 Data availability statement Data available on request from the authors. ‘upon reasonable request, the corresponding author, [p.h], will provide the data supporting the study’s conclusions’. Basic, share upon request. contact: pancawati hardiningsih. e-mail:[email protected]. References Alatawi, i. A., ntim, c. g., Zras, A., & elmagrhi, M. h. (2023). csr, financial and non-financial performance in the tourism sector: a systematic literature review and future research agenda. International Review of Financial Analysis, 89(c), 102734. https://doi.org/10.1016/j.irfa.2023.102734 Alonso-Almeida, M. M., Bagur-Femenias, l., llach, J., & perramon, J. (2018). sustainability in small tourist businesses: the link between initiatives and performance. 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