The Role of Sustainability Assurance in the Relationship Between Corporate Sustainability Performance and Corporate Financial Performance: A Comparative Study Between Nordic and Southwest EU Countries
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2025-11-06
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en
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This thesis investigates how sustainability assurance and institutional context shape the relationship between corporate sustainability performance (CSP) and corporate financial performance (CFP) among European firms. Drawing on stakeholder, legitimacy, and institutional theories, it explores whether external assurance enhances the credibility and financial relevance of sustainability reporting or merely serves as a symbolic signal. Using an unbalanced panel of 797 listed firms from Denmark, Finland, Sweden, Italy, Spain, and Portugal, over the period 2009–2023, the analysis integrates financial, ESG, and institutional data from LSEG Workspace, BoardEx, and the World Bank. Two-way fixed-effects regressions control for unobserved firm and year heterogeneity. Results show that CSP is weakly but positively associated with profitability, measured by return on assets, while market valuation (Tobin’s Q) shows no consistent response. Contrary to expectations, SA does not significantly moderate the CSP–CFP link, revealing a “Green Assurance Paradox”: assurance enhances visibility but not financial value. In contrast, institutional factors, particularly mandatory disclosure regimes under the EU Non-Financial Reporting Directive, significantly strengthen the CSP–CFP relationship. The findings indicate that the financial materiality of sustainability is institutionally embedded rather than firm-driven, emphasizing that regulation and substance, rather than symbolism, determine when sustainability creates measurable economic value.
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Faculteit der Managementwetenschappen