Environmental Performance in Sustainability Assurance Its Key Role and Impact
Main Article Content
Abstract
Our study aims to examine the relationship between environmental performance (EP) and the adoption of sustainability assurance (SA). In addition, the study determines the role of EP in explaining choices related to SA. We conducted an empirical study on French firms listed on the Paris stock exchange (CAC 40 index) spanning the period from 2012 to 2022. In order to estimate the econometric models, we utilized the Feasible Generalized Least Squares (FGLS) regression method. Our findings demonstrate that firms with good EP are more inclined to engage independent third parties. This engagement provides assurance for their sustainability reports compared to firms with poorer EP. In addition, our findings indicate that firms with poorer EP are more likely to select a higher assurance level compared to firms with good EP.
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
How to Cite
References
Ackers, B. (2017). Independent corporate social responsibility assurance: A response to soft laws, or influenced by company size and industry sector? International Journal of Disclosure and Governance, 14, 278–298. https://doi.org/10.1057/s41310-017-0026-7
Băndoi, A., Bocean, C. G., Del Baldo, M., Mandache, L., Mănescu, L. G., & Sitnikov, C. S. (2021). Including sustainable reporting practices in corporate management reports: Assessing the impact of transparency on economic performance. Sustainability, 13(2), 940.
Braam, G., & Peeters, R. (2018). Corporate sustainability performance and assurance on sustainability reports: Diffusion of accounting practices in the realm of sustainable development. Corporate Social Responsibility and Environmental Management, 25(2), 164-181.
Casey, R. J., & Grenier, J. H. (2015). Understanding and contributing to the enigma of corporate social responsibility (CSR) assurance in the United States. Auditing: A Journal of Practice & Theory, 34(2), 97–130.
Cheng, B., Ioannou, I., & Serafeim, G. (2014). Corporate social responsibility and access to finance. Strategic Management Journal, 35(1), 1–23.
Cho, C. H., & Patten, D. M. (2007). The role of environmental disclosures as tools of legitimacy: A research note. Accounting, Organizations and Society, 32, 639–647.
Cho, C. H., Michelon, G., Patten, D. M., & Roberts, R. W. (2014). CSR report assurance in the USA: An empirical investigation of determinants and effects. Sustainability Accounting, Management and Policy Journal, 5, 130-148.
Clarkson, P. M., Li, Y., Richardson, G., & Tsang, A. (2015). Voluntary external assurance on corporate social responsibility reports and the Dow Jones Sustainability Index Membership: International evidence. Working paper, UQ Business School. Retrieved from http://cear.gsu.edu/files/2015/09/Session-6-Richardson-Paper.pdf
Cohen, J. R., & Simnett, R. (2015). CSR and assurance services: A research agenda. Auditing: A Journal of Practice & Theory, 34(1), 59–74.
Dutta, P. (2020). Determinants of voluntary sustainability assurance: The importance of corporate environmental performance. Social Responsibility Journal, 16(8), 1403-1414.
Esteban-Arrea, R., & Garcia-Torea, N. (2022). Strategic responses to sustainability reporting regulation and multiple stakeholder demands: An analysis of the Spanish EU non-financial reporting directive transposition. Sustainability Accounting, Management and Policy Journal.
Farooq, M. B., & De Villiers, C. (2017). The market for sustainability assurance services: A comprehensive review of the literature and future avenues for research. Pacific Accounting Review, 29(1), 79–106.
Gillet-Monjarret, C. (2015). Assurance of sustainability information: A study of media pressure. Accounting in Europe, 12, 87-105.
Hodge, K., Subramaniam, N., & Stewart, J. (2009). Assurance of sustainability reports: Impact on report users’ confidence and perceptions of information credibility. Australian Accounting Review, 19(3), 178–194.
Hummel, K., Schlick, C., & Fifka, M. (2019). The role of sustainability performance and accounting assurors in sustainability assurance engagements. Journal of Business Ethics, 154, 733-757.
Kolk, A., & Perego, P. (2010). Determinants of the adoption of sustainability assurance statements: An international investigation. Business Strategy and the Environment, 19(3), 182–198.
KPMG. (2013). The KPMG survey of corporate responsibility reporting 2013. Retrieved from https://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/corporate-responsibility/Documents/corporate-responsibility-reporting-survey-2013-exec-summary.pdf
Martínez-Ferrero, J., & García-Sánchez, I.-M. (2016). Coercive, normative and mimetic isomorphism as determinants of the voluntary assurance of sustainability reports. International Business Review, 26(1), 102–118.
Mock, T. J., Rao, S. S., & Srivastava, R. P. (2013). The development of worldwide sustainability reporting assurance. Australian Accounting Review, 23(4), 280–294.
Odriozola, M. D., & Baraibar-Diez, E. (2017). Is corporate reputation associated with quality of CSR reporting? Evidence from Spain. Corporate Social Responsibility and Environmental Management, 24(2), 121–132.
Park, J., & Brorson, T. (2005). Experiences of and views on third-party assurance of corporate environmental and sustainability reports. Journal of Cleaner Production, 13(10–11), 1095–1106.
Peters, G. F., & Romi, A. M. (2015). The association between sustainability governance characteristics and the assurance of corporate sustainability reports. Auditing: A Journal of Practice & Theory, 34, 163–198.
Pflugrath, G., Roebuck, P., & Simnett, R. (2011). Impact of assurance and assurer’s professional affiliation on financial analysts’ assessment of credibility of corporate social responsibility information. Auditing: A Journal of Practice and Theory, 30(3), 239–254.
Qi, G. Y., Zeng, S. X., Shi, J. J., Meng, X. H., Lin, H., & Yang, Q. X. (2014). Revisiting the relationship between environmental and financial performance in Chinese industry. Journal of Environmental Management, 145, 349–356.
Sierra, L., Zorio, A., & Garcia-Benau, M. A. (2013). Sustainable development and assurance of corporate social responsibility reports published by Ibex-35 companies. Corporate Social Responsibility and Environmental Management, 20(6), 359–370.
Simnett, R., Vanstraelen, A., & Chua, W. F. (2009). Assurance on sustainability reports: An international comparison. The Accounting Review, 84(3), 937-967.
Simoni, L., Bini, L., & Bellucci, M. (2020). Effects of social, environmental, and institutional factors on sustainability report assurance: Evidence from European countries. Meditari Accountancy Research, 28(6), 1059-1087.
Spence, M. (1973). Job market signaling. Quarterly Journal of Economics, 87(3), 355–374.
Tan, S.-H., Habibullah, M. S., Tan, S.-K., & Choon, S.-W. (2017). The impact of the dimensions of environmental performance on firm performance in the travel and tourism industry. Journal of Environmental Management. https://doi.org/10.1016/j.jenvman.2017.02.029
Zorio, A., Garcia-Benau, M. A., & Sierra, L. (2013). Sustainable development and the quality of assurance reports: Empirical evidence. Business Strategy and the Environment, 22(7), 484–500.