Impact of Audit Committee Independence and Expertise at Company Level in Streamlining ESG Reporting: Quantitative Research

The purpose of this research is to establish the impact of the independence and expertise of the Audit Committee (CA) on the reporting of environmental, social, and governance (ESG) information for companies in the global automotive and truck manufacturing sector, as well as its influence on the ESG reporting on compliance with the Global Reporting Guidelines (GRI), in view of the global environmental objectives for the 2050 agenda. For this analysis, a sample of 224 public companies in this field, legal entities with global operations, was extracted from the Refinitiv Eikon database for the period 2019-2022. At the same time, the study also includes the analysis of the reports of several companies representing globally recognized brands. The rationale for selecting this industry was based on the fact that this sector is characterized by complex supply networks, strict environmental laws and high standards of social responsibility. The results show a significant positive effect of the independence of the audit committees on the level of compliance with the GRI guidelines, indicating the favorable effect of its attributes on the quality of ESG reporting. Our empirical analysis further highlights the critical role of members of the CA’s financial experts in improving the scope and level of CSR assurance. The paper validates the significance of the management control mechanism in creating the quality and quantity of ESG information for an environmentally sensitive sector and makes a significant contribution to understanding and improving ESG reporting practices in this industry.