Multinationals’ Accountability on Sustainability: The Evolution of Third-Party Assurance of Sustainability Reports

Journal of Business Ethics, 2012, 110(2), pp. 173-190

38 Pages Posted: 20 May 2012 Last revised: 1 Jan 2013

See all articles by Paolo Perego

Paolo Perego

Free University of Bozen-Bolzano

Ans Kolk

University of Amsterdam Business School

Date Written: May 19, 2012

Abstract

In this paper we explore how multinational corporations (MNCs) adopt assurance practices to develop and sustain organizational accountability for sustainability. Using a panel of Fortune Global 250 firms over a period of ten years, we document the diffusion patterns of third-party assurance of sustainability reports. We specifically investigate how evolving auditing practices, namely diversity of assurance standards and type of assurance providers, shape the quality of sustainability assurance statements. The results illustrate great variability in the adoption of assurance practices in the formative stages of this novel market. Our descriptive analysis indicates the relevance of external institutional pressures as well as internal resources and capabilities as underlying factors driving the adoption of assurance. Our evidence also suggests that several MNCs project a decoupled or symbolic image of accountability through assurance, thereby undermining the credibility of these verification practices. The paper contributes to the emerging literature on international accountability standards and emphasizes the need to enhance theory-based, cross-disciplinary knowledge related to auditing and accountability processes for sustainability.

Keywords: accountability, accountants, assurance, assurance statements, multinationals, reporting, standards, sustainability, verification

JEL Classification: D21, F23, G34, G38, K32, L20, M14, M41, Q20

Suggested Citation

Perego, Paolo and Kolk, Ans, Multinationals’ Accountability on Sustainability: The Evolution of Third-Party Assurance of Sustainability Reports (May 19, 2012). Journal of Business Ethics, 2012, 110(2), pp. 173-190, Available at SSRN: https://ssrn.com/abstract=2062900

Paolo Perego

Free University of Bozen-Bolzano ( email )

Faculty of Economics & Management
Piazza dell'Universitá 1
Bozen-Bolzano, 39100
Italy

HOME PAGE: http://www.unibz.it/en/faculties/economics-management/academic-staff/person/38679-paolo-perego

Ans Kolk (Contact Author)

University of Amsterdam Business School ( email )

Plantage Muidergracht 12
Amsterdam, 1018 TV
Netherlands
+31 20 525 4289 (Phone)
+31 20 525 5281 (Fax)

HOME PAGE: http://www.anskolk.eu

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