Abstract
A descriptive-exploratory analysis of assurance practices is presented in this paper, by analysing the patterns of sustainability assurance reporting in two national contexts with different levels of assurance activity (Italy and the U.S.) over a period of 11 years (2003/2013). The study is based on theoretical insights drawn from institutional sociology and normativity production. It is framed both in the Italian situation, where assurance statements consistently include a narrow set of formal and procedural communications, and in an unsettled situation in the U.S., where assurance activity is more incipient, but where experimentation in substantial assurance disclosure practices has more room to develop. Its main implication is that the diffusion of sustainability assurance and the creation of sustainability assurance disclosure norms are not without its cost: information quality does not increase with patterned practice. The results also point towards the noteworthy role of specific professionals in the earlier and later stages of assurance practice norms. They reveal a significant influence of non-Big4 firms (mainly certification bodies and consulting and engineering firms) in the diffusion of sustainability assurance disclosure norms. In contrast, the Big4 firms appear to be positively associated with the narrowing down of the assurance focus to a selected subset of this activity in later stages of the development of the assurance norm. In this regard, this study provides insight into the circumstantial—but relevant—carrier role of the Big4 firms in determining what “assurance” means.
Highlights
Over the past decade, sustainability reporting has begun to be equated with standard business practice among large global companies
This study shows how the crystallization of a sustainability assurance norm in Italy is coupled with a narrower focus on assurance disclosure, while the more unsettled and embryonic assurance practice in the U.S is coupled with more ambitious assurance disclosure practices
The choice of Italy and the U.S is driven by their contrasting situations regarding their respective levels of SR assurance services; Italy is among the countries with the highest and the U.S among those with the lowest assurance activity
Summary
Sustainability reporting (hereafter SR) has begun to be equated with standard business practice among large global companies. It has been suggested both by researchers (Hodge et al 2009; Kolk and Perego 2010) and by practitioners (ACCA 2004) that sustainability assurance, through independent and qualified external revision of the reports, can confer credibility and validity on the. The risk of perceiving SR as addressing only the needs of the most powerful stakeholders is reduced through the adoption of independent external assurance (Adams and Evans 2004; Deegan et al 2006; Hodge et al 2009; Kolk and Perego 2010; O’Dwyer and Owen 2007; Perego and Kolk 2012; Simnett et al 2009; Zadek et al 2004). The literature refers to several further benefits, as it is seen to contribute to decreasing agency costs (Fuhrmann et al 2017); providing stability to markets and their operations (Kend 2015); reducing information asymmetries (Fuhrmann et al 2017); and improving overall performance in relation to existing policies, commitments, and risks (Zadek et al 2004)
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