Determinants of external assurance of sustainability reporting: a European analysis
This study explores the determinants of voluntary external assurance of sustainability reporting in Europe. There is a limited understanding of assurance decisions of sustainability reporting, because it is a relative new practice. Europe is one of the leading regions in this growing type of assurance. The focus is on country- and firm-related factors to explain the choices regarding assurance, assurance provider and level of assurance. In total 3632 observations of 656 firms among 19 European countries are studied over a period from 2009 till 2014. It is hypothesized that firms in weaker legal systems and stakeholder-oriented countries are more likely to choose for assurance. Furthermore, environmental and social performance are expected to negatively influence the decision to assure sustainability reports. Consistent with the hypotheses firms in countries with a weaker legal system and in stakeholder-oriented countries are more likely to choose for assurance. In contrast to what was expected, environmentally and socially better performing firms are more likely to have their reports voluntarily assured. Additionally, the hypotheses are tested for the type of assurance provider and the level of assurance provided. To conclude, this research provides suggestions for further research in the field of assurance of sustainability reporting.
Faculteit der Managementwetenschappen