The Impact of Sustainability Accounting Disclosure Level on the Islamic Bank Value: An Applied Study on Arab Islamic Banks

The purpose of this paper is to examine the impact of sustainability accounting disclosure level on the value of Arab Islamic banks for the period (2016-2018). To achieve this objective, the researcher developed a disclosure index based on the elements of the sustainability dimensions required in accordance with the Sharia standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), and what the standards issued by the Sustainability Accounting Standards Board (SASB) addressed regarding the   sustainability   of   banks   as   a   specialized financial sector.
The results of the content analysis of the financial reporting and websites of (25) Arab Islamic banks indicated that the average sustainability disclosure index is approximately 62%, and that there are significant differences in disclosure levels between banks, ranging between 38% to 90%. The results of multiple linear regression analysis also indicated that there is a significant positive relationship between sustainability disclosure level and Islamic bank value (measured by Tobin's Q scale).
The importance of this study is to shed the light on the role that Islamic banking products may play in achieving social goals of sustainability, and its reflection on the estimated Islamic bank value from viewpoint of market participants. This paper recommended the importance of educating stakeholders (especially investors) concerning for the importance of integrating sustainability information with financial information for achieving comprehensive evaluation of the bank's performance.