Determinants of voluntary sustainability assurance: the importance of corporate environmental performance

Probal Dutta

Social Responsibility Journal, 2019, vol. 16, issue 8, 1403-1414

Abstract: Purpose - The purpose of this study is to investigate whether corporate environmental performance (CEP) exerts any significant influence on the voluntary external assurance of sustainability reports. Design/methodology/approach - The sample of this study includes 176 firm-year observations covering an eight-year period (2008-2015) for listed Finnish companies that have issued sustainability reports during the sample period. As the dependent variable “voluntary external assurance” is a binary variable, a logistic regression model has been estimated to observe the effect of CEP on the dependent variable. In addition, a number of control variables have also been included in the empirical model. Findings - The results of this study exhibit that Finnish firms with superior environmental performance in terms of greenhouse gas emissions and water consumption have their sustainability reports externally assured. Additionally, among the control variables, firm size, leverage and asset age are found to have significant impact on the adoption of voluntary sustainability assurance (VSA). These results are robust, as they do not change substantially when conducting sub-sample analyses. Originality/value - The literature on VSA is evolving slowly paying very little attention to the association between CEP and VSA. This empirical research aims to extend such scant literature. The results could have important implications to users of environmental information, managers and regulators.

Keywords: Corporate environmental performance; Sustainability reports; Propensity to consume water; Propensity to emit GHG; Propensity to produce waste; Voluntary external assurance; M41; M42 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:srjpps:srj-06-2019-0213

DOI: 10.1108/SRJ-06-2019-0213

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