Can sustainability report assurance be a collaborative process and practice beyond the ritual of verification?

Abstract

This study examines the role of assurance for sustainability reporting whether it has the role beyond a verification mechanism for corporate sustainability reporting. This paper looks beyond the discourse about managerial and professional capture in sustainability report assurance practice. Drawing on the in‐depth interviews with assurance practitioners for sustainability reporting in the United Kingdom from different professional backgrounds, it provides an evidence‐based illustration on how sustainability report assurance service can contribute to more corporate sustainable actions. The findings also highlight the potential influences of the assurance providers on the assurance process and corporate decision‐making. The conceptualization of the assurance from the service perspective and of the assurance providers as transformational leaders enables this paper to challenge the current framing of the assurance services as a verification ritual that constraint its impacts and contributions to sustainable development.

Do ESG reporting guidelines and verifications enhance firms' information disclosure?

“…Equipped with more information, external stakeholders may be better positioned to assess firms' overall performance, which shapes their purchasing and investment decisions to reward more sustainable firms (Rhodes, 2010; Sarti et al, 2018). However, current verification trends see a movement toward process‐focused verification, including those provided by the major auditing and accounting firms (Channuntapipat, 2021). Similarly, the Japanese EPA's reporting practices have also shifted in response to the greater popularity of GRI and its emphasis on process‐focused verification.…”

“…Most ESG reporting guidelines have converged to emphasize process‐focused verification. However, scholars have raised questions about this type of verifications and its ability to sufficiently improve firms' sustainability information disclosure (Channuntapipat, 2021;O'Dwyer, 2011; Sethi et al, 2017). Concern relates to the fact that the rules associated with process‐focused verification are not sufficiently strong for firms to disclose greater amounts of sustainability information.…”

“…Other questions about process‐focused verification relate to the independence of verifiers (Channuntapipat, 2021; O'Dwyer, 2011). As noted above, the core focus of accounting firms is to provide financial consultation (Sethi et al, 2017).…”

“…As noted above, the core focus of accounting firms is to provide financial consultation (Sethi et al, 2017). Clients who typically use these organizations' accounting and financial services are more likely to use their ESG verification services, which creates a potential conflict of interest in that, if a verifier delivers a harsh sustainability audit, the accounting firm may risk losing this client and all its related business (Channuntapipat, 2021; O'Dwyer, 2011; Sethi et al, 2017). As a result, accounting firms tend to limit their audit scope to a narrow area (e.g., investments in sustainability) (Sethi et al, 2017).…”

Analisis Pengaruh Kinerja Keberlanjutan Terhadap Kinerja Keuangan Selama Masa Pandemi Covid-19

“…Berdasarkan survey KPMG yang dirilis dalam News Center GRI pada 01 Desember 2020 disebutkan bahwa 96% dari G250 telah mengadosi laporan keberlanjutan pada kinerja keberlanjutan mereka. Angka tersebut menunjukkan bahwa laporan keberlanjutan merupakan salah satu media yang mengungkapkan aksi perusahaan dalam isu-isu keberlanjutan yang mencakup dimensi ekonomi, lingkungan, dan sosial (Channuntapipat, 2021). Pham et al (2021) dalam penelitiannya di Swedia menunjukkan bahwa laporan keberlanjutan berpengaruh positif terhadap kinerja keuangan perusahaan.…”