Sustainability Assurance in Socially-Sensitive Sectors: A Worldwide Analysis of the Financial Services Industry

Abstract

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.

The assurance of sustainability reports and their impact on stock market prices

“…Studying sustainability report assurance services responds to calls by Kolk and Perego (2010) and Cohen and Simnett (2015), among others, to examine not only the adoption of sustainability reports, but also their quality and reliability. This is a prominent area of research, especially after the global financial crisis, which caused the failure of credibility and confidence in CSR information disclosed by the companies themselves (Seguí-Mas et al 2018). Thus, there exists a huge amount of studies published in this field that can be divided in three main groups as was indicated in the introduction section.…”

Non-Financial Disclosure Assurance: Critical Insights from the Italian Financial Services Sector

“…Assurance procedures for reports on sustainability and social responsibility play a pivotal role in supporting the credibility of NFDs (Farooq & de Villiers, 2017). Thus, assurances can provide a guarantee on the content of sustainability reports, assure the quality of disclosure and reduce the risk of greenwashing (Glover & Touboulic, 2020;Seguí-Mas et al, 2018;Siano et al, 2017). As noted in previous studies, management decisions to procure a third party necessary to assure a sustainability report are important to increase a company's legitimacy (Bagnoli & Watts, 2017;Fernandez-Feijoo, Romero, & Ruiz, 2015).…”

“…These NFDs represented the final sample for analysis, which included 19 listed companies, six of which were insurance companies, and 32 banks. It was decided to focus on the financial services sector to enhance the comparability of data and respond to literature underlining that social accounting practices in this sector remain under investigated in comparison with others (Korzeb & Samaniego-Medina, 2019;Krasodomska, 2015;Rebai, Azaiez, & Saidane, 2016;Seguí-Mas et al, 2018).…”

Assurance on non-financial information in Spain

“…According to Adams and Narayanan (2007), normative isomorphism is consistent with the 'standardisation' of assurance through the adoption of standards (Smith et al 2011), such as ISAE 3000 and AA1000AS. Research has shown that most assurors use ISAE 3000 (Manetti and Becatti, 2009;Fonseca, 2010;Ferreira et al, 2015;Seguí et al, 2018). However, other assurors apply a combination of standards (Manetti and Toccafondi, 2012;Perego and Kolk, 2012).…”