Sustainability reporting assurance: Knowledge, lags, levels, and providers in leading global companies

This study investigates the factors influencing the adoption of assurance practices in sustainability reporting among leading companies across 42 countries from 2019 to 2022. Using panel data models, it examines the assurance lag, duality between the choice of audit firm and assuror for financial and environmental, social, and governance (ESG) assurance, and level of assurance (reasonable vs. limited). The results indicate that auditor–assuror duality may reduce the assurance lag through improved consistency and efficiency. However, this choice is not driven by expected benefits such as the inclusion of ESG information in annual reports or a preference for audit firms over consultants as assurors. Additionally, when audit firms follow specific assurance standards, there is evidence of a negative impact on the percentage of ESG information verified at the reasonable assurance level. This apparent negative impact is probably due to conservative approaches and strict methodological requirements. The findings offer insight to support decision-making for companies and regulators in enhancing transparency and trust in sustainability reports. This insight is particularly relevant in light of changes in European Union (EU) regulations that may impact assurance trends. Specifically, the new Corporate Sustainability Reporting Directive allows for different options that may be transposed differently by EU member states. The study thus has valuable implications regarding the future regulatory environment in many contexts.