What Gets Measured, Gets Managed: The Role of Sustainability Assurance in Green Transformation

Xiuhong Xia, Sifan Gao () and Hanlu Cheng
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Xiuhong Xia: Office of Audit, Lianyungang Technical College, Lianyungang 222006, China
Sifan Gao: College of Business, Qingdao University, Qingdao 266071, China
Hanlu Cheng: School of Management, Ocean University of China, Qingdao 266100, China

Sustainability, 2024, vol. 16, issue 18, 1-18

Abstract: Sustainability assurance (SA), an independent third-party evaluation aimed at enhancing the credibility of corporate sustainability disclosure, plays a vital role in fostering corporate green transformation. This paper systematically examines the impact of SA on corporate green transformation and the mechanisms through which it operates, using data on SA reports and green patents from A-share listed companies in China between 2010 and 2022. The findings reveal that SA significantly promotes corporate green transformation, particularly when conducted in accordance with standard ISAE 3000. Mechanism analysis indicates that SA facilitates green transformation by reducing the cost of credit and promoting risk-taking behaviors. Heterogeneity analysis further demonstrates that the positive effects of SA on green transformation are more pronounced in heavily polluting and competitive industries as well as in firms with weaker internal and external governance. This study not only underscores the beneficial impact and underlying mechanisms of SA on corporate green transformation but also contributes to the broader literature on the drivers of corporate green transformation.

Keywords: sustainability report; sustainability assurance; green transformation; cost of credit; risk-taking behaviors (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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