Determinants of Sustainability Reporting and Assurance
In the last years it has been indicated that in order to provide a full and accurate picture of their business, companies have to present additional information other than their financial report. Consequently there has been an increase in the demand for sustainability reporting. Unlike the obligatory character of the financial auditing practice, however, sustainability assurance remains voluntary. Nevertheless, it appears that companies find this non-financial auditing practice valuable, as the market for assurance continues to develop.
The voluntary character of sustainability assurance makes it interesting to know, what motivates companies to verify their reports. Overall there has been limited standalone research on the determinants of sustainability assurance. Nevertheless this paper attempts to present a summarized overview on the findings in this field of study. We focus on the determinants of adoption of sustainability assurance and on the choice of assurance provider.
The paper begins by reviewing the most fundamental theories on the matter, following which we outline key literature and present sustainability assurance in the practical context. The paper continues with a short description of the methodology used in our main sources of information – Kolk and Perego (2010) and Simnett et al. (2009). Afterwards we focus on the results of these two papers on the determinants of sustainability assurance and compare these to other scientific studies. In our analysis we distinguish between internal and external determinants, as this proves to be an appropriate and common differentiation in the literature. At the end of each section we try to present a critical appraisal for any possible discrepancies in the empirical results. In the final part we present major conclusions on this matter and outline possible fields of research.