Reporting and Assurance of Climate‐Related and Other Sustainability Information: A Review of Research and Practice

Zhou, Shan

doi:10.1111/auar.12387

Cited by 29 publications

(9 citation statements)

References 115 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Our review also complements two concurrent reviews. First, Zhou (2022) focuses on archival studies using Australian data and published between 2009 and 2021 in A*‐, A‐, and B‐rated journals on the ABDC list. Our review is not restricted to a specific country or method and covers a period from 2020 to August 2023.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Research on extended external reporting assurance: An update on recent developments

Venter,

Krasodomska

2024

Financ Manag Account

View full text Add to dashboard Cite

We review the recent literature on the assurance of Extended External Reporting published since the review published in 2021 in the Journal of International Financial Management & Accounting. Our review includes 50 articles published between 2020 and August 2023 across 30 journals ranked A*, A, or B on the Australian Business Deans Council 2022 Journal Quality List. We find that the literature continues to be dominated by positivist studies investigating the determinants and consequences of assurance. Studies on determinants examine carbon assurance, ownership, governance, and institutional themes. The consequences studies included in our review examine reporting‐related outcomes and investors' decisions. Other (qualitative) studies we reviewed examine issues such as assurance providers seeking meaning in their work and their attempts to promote assurance beyond merely a verification tool. We highlight several avenues for future research that could inform the work of standard setters and regulators.

show abstract

Section: Introductionmentioning

confidence: 99%

“…Second, Yan et al (2022) conducted a systematic literature review including 87 articles across 50 journals from 2003 to 2021. By contrast, our sample of 50 articles, includes 18 articles published before 2022, which means that our review mostly addresses literature not covered by either Zhou (2022) or Yan et al (2022).…”

Section: Introductionmentioning

confidence: 99%

Research on extended external reporting assurance: An update on recent developments

Venter,

Krasodomska

2024

Financ Manag Account

View full text Add to dashboard Cite

show abstract

“…It is now imperative to record the impact of climate change and sustainability on financial statements (Zhou, 2022). Sustainability reporting (SR) has gained significant importance, and it has now become part of corporate reporting in both developed and emerging economies (Emeka-Nwokeji et al , 2019), primarily due to the increased desire of stakeholders to evaluate firms’ performance.…”

Section: Introductionmentioning

confidence: 99%

The trilogy in sustainability of environmental performance, assurance quality and firm value

Khaireddine,

Lacombe,

Jarboui

2023

SAMPJ

View full text Add to dashboard Cite

Purpose Although the association between sustainability assurance (SA) quality and firm value has been examined in previous studies, the moderating relationship is novel in this study and highlights the effect of corporate environmental sustainability performance (CESP) on the relationship between SA quality and firm value. This study aims to examine whether such an effect is strengthened or weakened by eco-efficiency, as measured by ISO 14001 certification, aggregate CESP score and each individual dimension of CESP (emission reduction [ER], resource reduction [RR] and product innovation [PI]). Design/methodology/approach The sample includes 40 companies in Euronext Paris with the largest market capitalisations (the Cotation Assistée en Continu 40 [CAC 40] index) from 2010 to 2020. The authors apply the feasible generalised least squares regression technique to estimate all the regression models. Because observed associations may be biased by reverse causation or self-selection, the authors use the instrumental variable approach and Heckman two-stage estimation. Findings The results show that SA quality had a positive and significant effect on firm value. Second, the authors demonstrate that CESP, as assessed by ISO 14001 certification, has a stronger interaction with assurance quality and acting as a moderator variable. Using the ASSET4 scores, an alternative proxy for CESP, the authors find inconsistent evidence regarding the impact of CESP attributes. The CESP and ER scores are homogeneous and have a positive effect on firm value. However, the PI and RR CESP attributes are not homogenous and do not have the same interactive effect on firm value. The results are robust to the use of an instrumental variable approach and the Heckman two-stage estimation procedure. Research limitations/implications Policy implications: Regulators may be interested in the findings when considering current and future assurance requirements for sustainability reporting, and shareholders when considering SA as an investment choice criterion. The insights into and enhanced understanding of the incentives for obtaining high SA quality can help policymakers develop effective policies and initiatives for SA. Considering the possible improvements in sustainability performance when obtaining a high level of sustainability verification, governments need to consider mandating SA. Practical implications Firms receive clear confirmation of the importance of investing in SA quality. Financial markets do not evaluate SA dichotomously but reward companies with higher SA quality because of the greater credibility it provides. Firms should allocate a significant percentage of their annual budgets and other relevant resources to environmental training and development programmes to improve and maintain environmental performance. If they care about environmental issues, they must announce this by issuing sustainability reports and seeking assurance of the information disclosed. High-quality assurance not only has a significant effect on investors’ investment reliability judgements but also the perceived credibility of environmental performance fully moderates the effect of assurance on these judgements. Social implications This study has social implications; the authors find that the French market rewards firms that provide a high-quality assurance to guarantee the integrity of their sustainability reports. Therefore, by incorporating environmental sustainability into their financial goals, a better assurance ultimately will urge firms to move from green washing to strategic goals, which is beneficial for society. Further, firms that focus on sustainability as part of their business strategy may attract employees who engage in green behaviours at work and create a friendlier and productive environment because it gives meaning to the work they do and keeps them engaged to the level needed to perform their jobs capably. Originality/value This study contributes to the literature by re-examining the relationship between SA quality and firm value. It also provides new evidence on the moderating effect of CESP on the SA quality–firm value nexus. Specifically, it explores the joint effect of credibility and eco-efficiency on market confidence in sustainability information.

show abstract

“…We draw on the credibility enhancement, governance, and signalling perspectives to predict a positive relationship between carbon assurance and the quality of carbon disclosure. According to the credibility enhancement perspective, carbon assurance is performed by experts to enhance the credibility of carbon disclosure and boost trust among external stakeholders who care about climate threats to the firm's business (Zhou, 2022;Zhou et al, 2016). In addition, the assurance engagement creates a channel that enables directors to perceive the concerns and needs of stakeholders for carbon-related information (Datt et al, 2019(Datt et al, , 2020.…”

mentioning

confidence: 99%

Corporate carbon assurance and the quality of carbon disclosure

Luo

Tang

Fan

et al. 2023

Accounting & Finance

View full text Add to dashboard Cite

Based on an international sample, this study examines the association between corporate carbon assurance and carbon disclosure. We find that companies that adopt carbon assurance tend to have better carbon disclosure quality than their unassured peers. Cross‐sectional analyses demonstrate that the positive relationship is stronger in stakeholder‐oriented countries. We also document that carbon assurance plays a substitutive role for country‐level carbon regulation and social trust. Further analyses suggest that carbon assurance has differential impacts on specific types of carbon disclosure and the quality of carbon disclosure increases with the percentage of reported emissions assured and the level of carbon assurance.

show abstract

Reporting and Assurance of Climate‐Related and Other Sustainability Information: A Review of Research and Practice

Cited by 29 publications

References 115 publications

Research on extended external reporting assurance: An update on recent developments

Research on extended external reporting assurance: An update on recent developments

The trilogy in sustainability of environmental performance, assurance quality and firm value

Corporate carbon assurance and the quality of carbon disclosure

Contact Info

Product

Resources

About