An International Investigation of the Institutional Factors Driving Sustainability Assurance (original) (raw)
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Meditari Accountancy Research, 2020
Purpose The purpose of this study is to extend existing knowledge on the determinants of sustainability report (SR) assurance practices. Four different theories – stakeholder theory, institutional theory, signaling theory and legitimacy theory – are used to formulate several hypotheses regarding the main factors that can influence a company’s decision to assure its SRs. Design/methodology/approach Using a sample of 417 listed organizations based in different European countries over five years, the effects of stakeholder commitment, country orientation toward sustainability, firm environmental performance and business ethics controversies on the decision to assure SRs are assessed. Findings The results show that a company’s decision to assure its SRs is motivated by the need to maintain good relations with its stakeholders (which is in line with stakeholder theory and legitimacy theory), as well as by the willingness to signal their sustainability performance (which is in line with s...
Legitimising Corporate Sustainability Reporting Throughout the World
Australasian Accounting Business and Finance Journal, 2012
This paper explores corporate sustainability disclosure practices in a global context. A unique sample of 2009 sustainability reports from some of the world's largest companies in 24 diverse countries are examined using a comprehensive disclosure index. These reports are analysed to better understand how company characteristics and institutional factors explain sustainability communication using a legitimacy theory framework. The world renowned Global Reporting Initiative 2006 guidelines are used as the benchmark disclosure index checklist. The empirical results indicate that the average level of sustainability disclosure is a surprisingly high 61.9 percent. Statistical analysis indicates that high profile industries and additional assurance procedures influence the disclosure of more sustainability information. Interestingly, companies operating in emerging country systems disclose more sustainability information than Anglo-Saxon or Communitarian jurisdictions. Consistent with legitimacy theory, these results suggest that these globally well known firms use sustainability disclosure as a legitimising tool.
Sustainability, 2018
Sustainability reporting and assurance have considerably increased in the last decades. Among different sectors, 'sensitive sectors' attracted the attention of many academics. However, most of research works were focused only on 'environmentally-sensitive sectors'. Therefore, after the loss of trust caused by the lack of transparency due to the crisis, 'socially-sensitive sectors' as financial services sector needs to strengthen users' confidence in the credibility of their reported activities. The aim of this paper is to assess assurance practices worldwide in one of the main 'socially-sensitive sectors': the financial services sector. We study what factors are associated with adoption of assurance and choice of assurance provider, and whether assurance statements differ across providers. Our results reveal that, compared to the global context, companies operating in the financial services sector are more likely to adopt assurance and to choose accountants as assurance providers. Our findings show that adoption of assurance depends on company size. We also found that companies using the financial services sector supplement are more prone to adopt assurance. Our results also evidence that choice of assurance provider depends on the country and listing status Finally, our research shows a great variability in assurance statements across providers.
… Business & Economics Research Journal (IBER), 2010
Over the last years, sustainable development has become one of the major issues that all global organizations are facing. The Global Reporting Initiative, located in the Netherlands and considered the leading authority world-wide, has developed what is currently considered the common framework for sustainability reporting. The latest version of their reporting guidelines called G3 contains detailed instructions and standards on how to prepare sustainability reports. The goal of this study is to determine if there are significant differences with regard to size, financial performance, capital structure, and corporate governance between firms that publish a G3 sustainability report to those that don't. The results of this analysis show that corporations with the characteristics of being located in Europe, and/or being active in the energy or producing sector, and/or with a higher profit margin are more likely to produce high quality sustainability reports. Corporations with a higher long-term growth rate, on the other hand, are less likely to produce sustainability reports.
Institutional Constraints, Stakeholder Pressure and Corporate Environmental Reporting Policies
Business Strategy and the Environment, 2017
Within the theoretical framework of socio-political economics, and more specifically of stakeholder theory, this work examines whether companies operating under different institutional constraints and stakeholder pressure tend to emphasize different models of corporate environmental reporting. Furthermore, the paper tests whether different corporate environmental reporting policies are driven by the countries' corporate governance systems. A sample of 3931 international companies was examined through a logistic biplot and conditional mean linear regression models. The main results reveal that companies follow two distinct environmental reporting approaches, which depend on specific stakeholders and institutional requirements. The first model, which is followed by firms within codified law countries, mostly focuses on water and emissions. The second approach, mainly followed by companies operating in common law countries, emphasizes materials and energy issues. This finding reveals that companies gradually modify their environmental strategies to make themselves more compatible with the characteristics of the social and institutional environment, which will result in several corporate benefits. The paper provides several outstanding implications for companies' strategic managers, national institutions and firms' stakeholders, especially for investors and customers.
The Development of Worldwide Sustainability Reporting Assurance
Australian Accounting Review, 2013
This research investigates the development of assured sustainability reports (SRs) during this century's first decade. More specifically, it presents basic descriptive data on a sample of 148 SRs published in 2006 and 2007 and contrasts this sample with the sample discussed in Mock et al. 2007. The prior study examined a sample of 130 assured SRs issued between 2002 and 2004. Both samples provide information about the nature of SRs, allowing us to investigate important questions such as which countries and industries are more likely to have an assurance statement, what levels of assurance are provided, and what factors affect the level of assurance provided. In addition to providing descriptive data relative to the above questions, we run logistic regressions where the dependent variable is whether a Big 4 firm provided the assurance for both periods being considered. Some important differences are observed related to whether the assurance provided applies to both the quantitative and qualitative assertions made in the report (significantly negatively associated with the Big 4 in the 2002-2004 period, but not significant in 2006-2007), whether the report uses symbols to identify assured statements (significantly positively associated with the Big 4 in
Corporate Social Responsibility and Environmental Management, 2019
The information contained in corporate social responsibility (CSR) reports is a controversial issue, and it has generated an important debate among academics regarding company disclosure strategies. Environmental matters are especially relevant given their impact on sustainable development. The present study has two objectives. The first is to determine which Global Reporting Initiative (GRI) environmental indicators are reported less frequently. The second is to predict the evolution of these indicators in light of the institutional pressures that companies try to resist. Specifically, the study of the environmental dimension of the GRI focusses on an analysis of the following: materials, energy, water, biodiversity, emissions, effluents and waste, products and services, compliance, transport, environmental assessment, and environmental grievance mechanisms. A content analysis of CSR reports from some of the world's largest companies reveals that the indicators least disclosed ...
Assurance on Sustainability Reports: An International Comparison
The Accounting Review, 2009
ABSTRACT: Globally, companies increasingly publish separate general purpose, nonfinancial (sustainability) reports. Some of these are independently assured and assurers may or may not be from the auditing profession. We seek to understand this emerging voluntary assurance market. Using a sample of 2,113 companies (from 31 countries) that produced sustainability reports between 2002–2004, we use sequential logit analysis to identify the factors associated with the decision to voluntarily purchase assurance and the choice of assurance provider. We hypothesize that a company's need to enhance credibility through assurance and choice of assurance provider will be a function of company-, industry-, and country-related factors. Our results support the argument that companies seeking to enhance the credibility of their reports and build their corporate reputation are more likely to have their sustainability reports assured, although it does not matter whether the assurance provider com...
Asian Journal of Sustainability and Social Responsibility, 2019
The purpose of this paper is to explore the main actors' views on the current state of sustainability reporting in a developing country context. This qualitative study is based on the interviews of 20 individuals and organizations from Pakistan who were identified as main actors involved in the practice of sustainability reporting. This paper draws on the arguments of multiple theoretical frameworks, including legitimacy theory, stakeholders' theory, institutional theory, political cost theory, and signalling theory. Following a semi-structured interview protocol, main actors were asked to share their views on the drivers and barriers of sustainability reporting, sufficiency and suitability of sustainability-related regulation and standards, perceived benefits of sustainability reporting, level of stakeholder engagement and transparency. Interviews were then analysed to compare the viewpoints of different stakeholder groups on various issues. This paper concludes that, like other emerging and developing economies, the practice of sustainability reporting is largely driven by the external forces. Foreign buyers, international professional associations and standard-setting organizations are playing a pivotal role in the emergence and development of sustainability reporting. Sustainability reporting awards also played an important role as they provide the normative basis and intangible benefits for reporting. Despite these external forces driving the emergence and development of SR in Pakistan, the structural and cultural conditions that exist in the societal context of Pakistan significantly impact the disclosure practices and organizational rationales for SR. In particular, weak government structures, lack of awareness and interest in sustainability matters, lack of regulation, lack of enforcement capabilities, lack of a political will has been identified as the main barriers of SR. The paper explores the perceptions of both managerial and non-managerial stakeholders regarding the current state of sustainability reporting in Pakistan.
Corporate Characteristics and Sustainability Reporting: From the Lens of the Legitimacy Theory
Asia-Pacific Management Accounting Journal
This study intended to achieve two main objectives, which were to determine the level of sustainability reporting disclosure and to examine the relationship between corporate characteristics and sustainability reporting disclosure. This study used the latest Sustainability Framework introduced by Bursa Malaysia in 2015 as the basis for evaluating and measuring the level of sustainability reporting disclosure. 80 of the top 100 companies by market capitalization in the Malaysian Stock Market were taken as the sample. The published sustainability reports (within the annual reports or stand-alone sustainability reports) from 2017 to 2018 were reviewed and analyzed using the content analysis approach to test the objectives of this study. Drawing on the cy theory perspectives, corporate characteristics, such as firm size, industry type, and assurance statement practices, were chosen as the independent variables. Thefindings showed that firm size, industry type, and assurance statement pr...