Assessing The Effectiveness of Sharia-Based SustainabilityReporting Model in Enhancing Islamic Social Finance for Sustainable Development and Planning of Village Assets: A Case ‎Study of Sumberdodol Village

  • Authors

    • Yunaita Rahmawati Department of Sharia Accounting, Faculty of Islamic Economics and Business, State Islamic Institute of Ponorogo, Ponorogo, Jawa ‎Timur, 63492, Indonesia
    • Muhtadin Amri Department of Sharia Accounting, Faculty of Islamic Economics and Business, State Islamic Institute of Ponorogo, Indonesia, Ponorogo, ‎Jawa Timur, 63492, Indonesia
    • Choirul Daroji Department of Islamic Economics, Faculty of Islamic Economics and Business, State Islamic Institute of Ponorogo, Ponorogo, Jawa ‎Timur, 63492, Indonesia
    • Ajeng Wahyuni Department of Zakat and Waqf Management, Faculty of Islamic Economics and Business, State Islamic Institute of Ponorogo, Ponorogo, ‎Jawa Timur, 63492, Indonesia
    • Eka Rahayu Department of Islamic Banking, Faculty of Islamic Economics and Business, State Islamic Institute of Ponorogo, Ponorogo, Jawa Timur, ‎‎63492, Indonesia
    https://doi.org/10.14419/gc076q42

    Received date: July 5, 2025

    Accepted date: August 5, 2025

    Published date: August 15, 2025

  • Accountability; Islamic Social Finance; Sharia-Based Sustainability Reporting; Sustainable Development; Transparency

  • Abstract

    This research analyzes the role of a Sharia-compliant sustainability reporting model in increasing the effectiveness of Islamic social finance ‎for sustainable development and village asset management in Sumberdodol Village. The study employs a descriptive quantitative approach ‎, which integrates questionnaire surveys and structured interviews with the BUMDES management. The results showed that compliance with ‎Sharia law brings considerable improvements concerning a business’s financial management, accountability, and transparency. In particular, ‎the results observed improved transparency and accuracy in financial reporting, accountability in asset management, and a focus on social ‎responsibility coupled with strategic planning as core elements of financial management. The study concludes that the Sharia-compliant ‎sustainability reporting model successfully enhances Islamic social finance for sustainable development and village asset management in ‎rural areas while also offering pragmatic approaches to the management of village assets‎.

  • References

    1. Adawiyah RAA, Adirestuty F, Irsyad SM, Chazanah IN, Mulyani YS & Indrarini R (2025), Sustainability reporting and Sharia compliance in Is-lamic financial institutions: an empirical evaluation of emerging and developing countries. Journal of Islamic Accounting and Business Research. https://doi.org/10.1108/JIABR-11-2023-0402.
    2. Afrizal N, Safelia N & Muda I (2023), Determinants of carbon emission disclosure and sustainability reporting and their implications for investors’ reactions: The case of Indonesia and Malaysia. International Journal of Management and Sustainability, 12(2), 271–288. https://doi.org/10.18488/11.v12i2.3375.
    3. Al-Daihani M, Dirie KA, Muneem A, Lateb NA & Bouteraa M (2025), Islamic social finance and its potential in addressing natural disaster emer-gencies and advancing sustainable development goals: a proposed model. International Journal of Ethics and Systems. https://doi.org/10.1108/IJOES-05-2024-0138.
    4. Anantadjayaa SH, Djuliardhie RR, Nirmala T, Hartauer A, Hartauer C & Nawangwulan IM (2024), Do CAMEL and sustainability influences a bank performance? Finance Theory and Practice, 28(1), 204–216. https://doi.org/10.26794/2587-5671-2024-28-1-204-216.
    5. Ardiana PA (2021), Stakeholder engagement in sustainability reporting by Fortune Global 500 companies: a call for embeddedness. Meditari Ac-countancy Research, 31(2), 344–365. https://doi.org/10.1108/MEDAR-12-2019-0666.
    6. Azid T, Antonio MS, Kayani Z & Mukhlisin M (2022), Islamic Economic Institutions in Indonesia. In World Scientific eBooks. https://doi.org/10.1142/13317.
    7. Blanc R, Cho CH, Sopt J & Branco MC (2017), Disclosure responses to a corruption scandal: the case of Siemens AG. Journal of Business Ethics, 156(2), 545–561. https://doi.org/10.1007/s10551-017-3602-7.
    8. Budiharto N & Sismarwoto E (2020), Freedom of contracts and dispute settlement between conventional banking and sharia banking. International Journal of Economics and Business Administration, VIII (1), 285–291. https://doi.org/10.35808/ijeba/438.
    9. Dewi AA, Saraswati E, Rahman AF & Atmini S (2023), Materiality, stakeholder engagement disclosure, and corporate governance: Critical ele-ments for the quality of sustainability reporting. Cogent Business & Management, 10(1). https://doi.org/10.1080/23311975.2023.2175437.
    10. Elmahgop, F., Alsulami, F., Mohammed, M. G. A., Abdel-Gadir, S., & Elhassan, T. (2025), The socio-economic impacts of WAQF investment funds as a model for sustainable financing in Saudi Arabia. Sustainability, 17(9), 3805 https://doi.org/10.3390/su17093805.
    11. Farooq MB & De Villiers C (2018), The shaping of sustainability assurance through the competition between accounting and non-accounting pro-viders. Accounting Auditing & Accountability Journal, 32(1), 307–336. https://doi.org/10.1108/AAAJ-10-2016-2756.
    12. Firmialy SD & Nainggolan YA (2018), Constructing the ideal SRI (sustainability reporting index) framework for Indonesian market: combined per-spectives from rating agencies, academics, and practitioners. Social Responsibility Journal, 15(5), 573–596. https://doi.org/10.1108/SRJ-07-2016-0128.
    13. Giner B & Luque-Vílchez M (2022), A commentary on the “new” institutional actors in sustainability reporting standard-setting: a European per-spective. Sustainability Accounting Management and Policy Journal, 13(6), 1284–1309. https://doi.org/10.1108/SAMPJ-06-2021-0222.
    14. Gutiérrez-Ponce H & Wibowo SA (2023), Do sustainability practices contribute to the financial performance of banks? An analysis of banks in Southeast Asia. Corporate Social Responsibility and Environmental Management, 31(2), 1418–1432. https://doi.org/10.1002/csr.2641.
    15. Haddad A & Souissi MN (2022), The impact of Shariah Advisory Board characteristics on the financial performance of Islamic banks. Cogent Economics & Finance, 10(1), 1–38. https://doi.org/10.1080/23322039.2022.2062911.
    16. Hardiningsih P, Nuswandari C, Srimindarti C, Lisiantara GA & Setiawati I (2024), A literacy of the relevance of Asian value sustainability report-ing in Indonesia. Investment Management and Financial Innovations, 21(1), 76–87. https://doi.org/10.21511/imfi.21(1).2024.07.
    17. Harymawan I, Nasih M, Agustia D, Putra FKG & Djajadikerta HG (2022), Investment efficiency and environmental, social, and governance re-porting: Perspective from corporate integration management. Corporate Social Responsibility and Environmental Management, 29(5), 1186–1202. https://doi.org/10.1002/csr.2263.
    18. Husnah H & Fahlevi M (2023), How do corporate social responsibility and sustainable development goals shape financial performance in Indone-sia’s mining industry? Uncertain Supply Chain Management, 11(3), 1383–1394. https://doi.org/10.5267/j.uscm.2023.5.099.
    19. Jan A, Rahman HU, Zahid M, Salameh AA, Khan PA, Al-Faryan MAS, Aziz RBC & Ali HE (2023), Islamic corporate sustainability practices in-dex aligned with SDGs towards better financial performance: Evidence from the Malaysian and Indonesian Islamic banking industry. Journal of Cleaner Production, 405, 136860. https://doi.org/10.1016/j.jclepro.2023.136860.
    20. Justina D & Lantara IWN (2023), Governance mechanism to improve sustainability report quality: the impact on information risk and stock market participation. International Journal of Quality & Reliability Management, 41(5), 1253–1269. https://doi.org/10.1108/IJQRM-01-2023-0017.
    21. Marzuki, M. M., Majid, W. Z. N. A., & Rosman, R. (2023), Corporate social responsibility and Islamic social finance impact on banking sustainabil-ity post-COVID-19 pandemic. Heliyon, 9(10), e20501. https://doi.org/10.1016/j.heliyon.2023.e20501.
    22. Menne F, Surya B, Yusuf M, Suriani S, Ruslan M & Iskandar I (2022), Optimizing the financial performance of SMEs Based on Sharia Economy: Perspective of Economic Business Sustainability and Open Innovation. Journal of Open Innovation Technology Market and Complexity, 8(1), 18. https://doi.org/10.3390/joitmc8010018.
    23. Ningsih S, Prasetyo K, Puspitasari N, Cahyono S & Kamarudin KA (2023), Earnings Management and Sustainability Reporting Disclosure: Some Insights from Indonesia. Risks, 11(7), 137. https://doi.org/10.3390/risks11070137.
    24. Permatasari, P., Ilman, A. S., Tilt, C. A., Lestari, D., Islam, S., Tenrini, R. H., Rahman, A. B., Samosir, A. P., & Wardhana, I. W. (2021), The Vil-lage Fund Program in Indonesia: Measuring the effectiveness and alignment to sustainable development goals. Sustainability, 13(21), 12294 https://doi.org/10.3390/su132112294.
    25. Putri NA & Pratama A (2023), Quality of financial disclosures related to environmental, social, and governance matters, and firm characteristics and firm value: A comparative study across four ASEAN countries. International Journal of Management and Sustainability, 12(3), 404–418. https://doi.org/10.18488/11.v12i3.3459.
    26. Ramadhan MA, Mulyany R & Mutia E (2023), The irrelevance of R&D intensity in the ESG disclosure? Insights from top 10 listed companies on global Islamic indices. Cogent Business & Management, 10(1). https://doi.org/10.1080/23311975.2023.2187332.
    27. Rong T, Ristevski E & Carroll M (2023), Exploring community engagement in place-based approaches in areas of poor health and disadvantage: A scoping review. Health & Place, 81, 103026. https://doi.org/10.1016/j.healthplace.2023.103026.
    28. Sebrina N, Taqwa S, Afriyenti M & Septiari D (2022), Analysis of sustainability reporting quality and corporate social responsibility on companies listed on the Indonesia stock exchange. Cogent Business & Management, 10(1). https://doi.org/10.1080/23311975.2022.2157975.
    29. Setyaningsih S, Widjojo R & Kelle P (2024), Challenges and opportunities in sustainability reporting: a focus on small and medium enterprises (SMEs). Cogent Business & Management, 11(1). https://doi.org/10.1080/23311975.2023.2298215.
    30. Suhatmi EC, Dasman S, Badarisman D, Nahar A & Jaya ANA (2024), Sustainability Reporting and its Influence on Corporate Financial Perfor-mance: A Global analysis. The Journal of Academic Science., 1(6), 725–740. https://doi.org/10.59613/d0qn5c22.
    31. Sumarta NH, Amidjaya PG, Prabowo MA & Mulyaningsih T (2023), Post-Issue of Sustainability Report: Does market valuation improve? Interna-tional Journal of Economics and Management, 17(1), 77–91. https://doi.org/10.47836/ijeam.17.1.06.
    32. Sumarta NH, Rahardjo M, Satriya KKT, Supriyono E & Amidjaya PG (2021), Bank ownership structure and reputation through sustainability re-porting in Indonesia. Social Responsibility Journal, 19(6), 989–1002. https://doi.org/10.1108/SRJ-01-2021-0024.
    33. Sunani A, Widodo UPW, Wijaya RMSA & Kirana NWI (2024), Environmental disclosure analysis of manufacturing companies to realize sustaina-ble green economy. Intangible Capital, 20(2), 321. https://doi.org/10.3926/ic.2505.
    34. Supriyadi, Sulistiyo AB & Roziq A (2019), Influence disclosure of sustainability report and company size on dividend policy and company value with profitability as intervening variables. International Journal of Scientific and Technology Research, 8(7), 716–721.
    35. Tahmasebi, F. (2023), The digital divide: A qualitative study of technology access in rural communities. AI and Tech in Behavioral and Social Sci-ences, 1(2), 33–39 https://doi.org/10.61838/kman.aitech.1.2.6.
    36. Usman NB (2020), CSR performance, Firm’s Attributes, and sustainability reporting. International Journal of Business and Society, 21(2), 521–539. https://doi.org/10.33736/ijbs.3269.2020.
    37. Van Der Waal JW, Thijssens T & Maas K (2020), The innovative contribution of multinational enterprises to the Sustainable Development Goals. Journal of Cleaner Production, 285, 125319. https://doi.org/10.1016/j.jclepro.2020.125319.
    38. Wijayanti R & Setiawan D (2023), The role of the board of directors and the sharia supervisory board on sustainability reports. Journal of Open In-novation Technology Market and Complexity, 9(3), 100083. https://doi.org/10.1016/j.joitmc.2023.100083.
    39. Windiarti F & Siregar SV (2023), Organization Visibility and Firm Ownership: Association with Sustainable Development Goals Reporting. The International Journal of Interdisciplinary Organizational Studies, 19(1), 39–61. https://doi.org/10.18848/2324-7649/CGP/v19i01/39-61.
    40. Yáñez S, Uruburu Á, Moreno A & Lumbreras J (2018), The sustainability report as an essential tool for the holistic and strategic vision of higher education institutions. Journal of Cleaner Production, 207, 57–66. https://doi.org/10.1016/j.jclepro.2018.09.171.

  • Downloads

  • How to Cite

    Rahmawati, Y., Amri , M. ., Daroji , C. ., Wahyuni , A. ., & Rahayu, E. . (2025). Assessing The Effectiveness of Sharia-Based SustainabilityReporting Model in Enhancing Islamic Social Finance for Sustainable Development and Planning of Village Assets: A Case ‎Study of Sumberdodol Village. International Journal of Accounting and Economics Studies, 12(4), 374-385. https://doi.org/10.14419/gc076q42