The Association between Sustainability Governance Characteristics and the Assurance of Corporate Sustainability Reports

Peters, Gary F.; Romi, Andrea M.

doi:10.2139/ssrn.2198068

Cited by 119 publications

(280 citation statements)

References 82 publications

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“…In part, professional accountants (traditionally known as the Big Four auditors) are likely to issue similar assurance statements to financial audits. They are subject to independent and professional conduct requirements (Peters & Romi, 2014), providing more detailed and consistent statements, transferring audit techniques to the assurance process (Power, 2003), and are more effective monitors as a result of their reputational capital (Simnett et al, 2009). Engineering and consultancy firms as assurance providers for qualitative statements have greater subject matter expertise on specific sustainability issues (Huggins, Green, & Simnett, 2011), providing assurance statements which are more informative, complete, and clear (Hasan, Roebuck, & Simnett, 2003).…”

Section: The Reputational Capital Of Assurance Providers As a Modermentioning

confidence: 99%

“…For the analysis, the explanatory variable for cost of capital is Assurance, which is measured as 1 if the company discloses its sustainability report with some type of assurance provided by professional accountants, third party consultants, or environmental engineers. This is the common measure in management and accounting research (Dhaliwal et al, 2012;Herda, Taylor, & Winterbotham, 2014;Peters & Romi, 2014;Simnett et al, 2009;Vaz, Fernandez-Feijoo, & Ruiz, 2016;Weber, 2014;Wong & Millington, 2014).…”

Section: Sustainability Assurancementioning

confidence: 99%

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Sustainability assurance and cost of capital: Does assurance impact on credibility of corporate social responsibility information?

Martínez‐Ferrero

García‐Sánchez

2017

Business Ethics: A European Review

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This paper aims to examine the credibility value of sustainability assurance and the type of assurance provider on cost of capital. A large sample of international companies from the period 2007–2014 was used to develop our models of analysis. We find a greater decrease in cost of capital for companies that publish and assure their social and environmental reports. Thus, voluntary sustainability disclosures decrease the cost of capital. However, companies also have the opportunity to reinforce this decrease by providing an assurance statement, so increasing the credibility of corporate social responsibility information. In addition, the decrease in the cost of capital is significantly higher when such assurance is provided by a top‐tier accountancy firm instead of by engineering or consultancy firms; this result supports also the reputational capital of accountancy firms.

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Section: The Reputational Capital Of Assurance Providers As a Modermentioning

confidence: 99%

Section: Sustainability Assurancementioning

confidence: 99%

Sustainability assurance and cost of capital: Does assurance impact on credibility of corporate social responsibility information?

Martínez‐Ferrero

García‐Sánchez

2017

Business Ethics: A European Review

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“…Moreover, there has been an increasing recognition of the role of corporate governance mechanisms including board of directors and sustainability committees in monitoring sustainability performance and reporting (Post et al 2011;Zhang et al 2013;Peters and Romi 2014;Trotman and Trotman 2015). 22 The voluntary demand for independent external assurance could help reassuring the accomplishment of the sustainability-related tasks.…”

mentioning

confidence: 99%

CEO Compensation and Sustainability Reporting Assurance: Evidence from the UK

2017

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Companies are expected to monitor sustainable behaviour to help improve performance, enhance reputation and increase chances of survival. This paper examines the relationship between sustainability committees and independent external assurance on the inclusion of sustainability-related targets in CEO compensation contracts. Using a sample of UK FTSE350 companies for 2011-2015 and controlling for governance and firm characteristics, we find both board-level sustainability committees and sustainability reporting assurance have a positive and significant association with the inclusion of sustainability terms in compensation contracts. However, there is no joint impact between the voluntary use of independent external assurance and the role of sustainability committees on CEO compensation contracts. Sustainability-related terms in compensation contracts are more likely to be included, and higher compensation is likely to be paid, when assurance is provided by a Big4 firm and when a company operates in a sustainability-sensitive industry. Our findings highlight the potential of assured sustainability reports in assessing CEO performance in sustainability-related tasks, especially when sustainability metrics are included in CEO compensation contracts. Overall, our results suggest companies that invest in voluntary assurance are more likely to monitor management's behaviour and be concerned about the achievement of sustainability goals.

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“…Various theories have been proposed to explain ethical or economic incentives for the demand for assurance (e.g., O'Dwyer and Owen 2007;Hodge et al 2009;Peters and Romi 2015). Among these integrative perspectives, legitimacy theory and stakeholder theory (i.e., theories of political economy) appear to be the most influential (Guthrie and Parker 1989).…”

Section: Theories Of the Demand For Sustainability And Carbon Auditingmentioning

confidence: 99%

Institutional Influence, Transition Management and the Demand for Carbon Auditing: The Chinese Experience

Tang

2018

Australian Accounting Review

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The primary objective of this study is to investigate factors associated with the increase in demand for carbon auditing in China. Based on an analysis of publicly available carbon‐related information and data, the paper documents the large amount of carbon auditing that occurred in the public sector during the period 2009–2013. We find that the creation of carbon institutions and the significant increase in governmental green funding were the main reasons for the emergence of carbon auditing in this period. The change in models of economic development attempting to balance GDP growth and ecosystem protection, in addition to institutional reform, has led carbon auditing from rhetoric to practice. In addition, we show that carbon auditing serves as a tool for the management of transitions and the governance of sustainable socio‐technical and organisational innovation and transformation.

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The Association between Sustainability Governance Characteristics and the Assurance of Corporate Sustainability Reports

Cited by 119 publications

References 82 publications

Sustainability assurance and cost of capital: Does assurance impact on credibility of corporate social responsibility information?

Sustainability assurance and cost of capital: Does assurance impact on credibility of corporate social responsibility information?

CEO Compensation and Sustainability Reporting Assurance: Evidence from the UK

Institutional Influence, Transition Management and the Demand for Carbon Auditing: The Chinese Experience

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