Sustainability Assurance and its influence on Greenhouse Gas Emissions: Accountability or Symbolism??

Abstract

This paper examines the association of sustainability assurance (SA) choices on the relationship between greenhouse gas (GHG) emissions and corporate financial performance (CFP) using data from 38 countries. Different combinations of SA choices are used to assess whether SA plays a more governmental role with the reduction of GHG emissions, or merely as a symbolic mechanism to improve financial performance through stakeholder appeasement. This study finds mixed results that, for the long term, the SA choice combination of full-scope assurance and a provider from the accounting profession weakens the relationship between GHG emissions and CFP, effectively playing a symbolic role. The SA choice combination of full-scope assurance and a reasonable level of assurance strengthens this relationship, effectively playing a governmental role. Collectively, these findings have important implications for academics and practitioners in understanding the current sustainability assurance landscape and highlighting the existing problems regarding the (mis)use of assurance for greenwashing and exploitation purposes.