The Association between Sustainability Governance Characteristics and the Assurance of Corporate Sustainability Reports

53 Pages Posted: 9 Jan 2013 Last revised: 13 Jun 2016

See all articles by Gary F. Peters

Gary F. Peters

University of Arkansas at Fayetteville

Andrea Romi

Texas Tech University - Area of Accounting

Date Written: July 15, 2013

Abstract

The following study seeks to provide evidence on whether sustainability-oriented corporate governance mechanisms impact the voluntary assurance of corporate sustainability reports. Specifically, we consider the presence and characteristics of environmental committees on the board of directors and a Chief Sustainability Officer (CSO) among the management team. When examining the assurance services, we make a distinction between those services performed by external assurance providers and the company’s internal auditors. We find that the presence of an environmental committee and a CSO are positively associated with corporate sustainability report assurance services. However, presently, environmental committees appear to prefer the services of consultants and internal auditors. Additional analysis suggests the associations are conditional upon the committee’s expertise and overlap with the audit committee. Similarly, sustainability assurance appears to increase in relation to CSO expertise. Our results are particularly important to those with interests in understanding the evolution and demand for sustainability assurance, as well as the impact of environmental governance mechanisms that are increasingly part of the corporate mosaic. Overall our results suggest that there remain large opportunities for both external and internal audit standard setters to establish stronger guidelines increasing the value and demand for sustainability assurance services.

Keywords: sustainability assurance, corporate governance, assurance providers, Chief Sustainability Officers, environmental committees

JEL Classification: M14, M49

Suggested Citation

Peters, Gary F. and Romi, Andrea, The Association between Sustainability Governance Characteristics and the Assurance of Corporate Sustainability Reports (July 15, 2013). Available at SSRN: https://ssrn.com/abstract=2198068 or http://dx.doi.org/10.2139/ssrn.2198068

Gary F. Peters

University of Arkansas at Fayetteville ( email )

Sam M. Walton College of Business
Department of Accounting
Fayetteville, AR 72701

Andrea Romi (Contact Author)

Texas Tech University - Area of Accounting ( email )

P.O. Box 42101
Lubbock, TX 79409
United States

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