Workshop’s Topic: Regulators worldwide have mandated or are considering mandating sustainability assurance in response to the growing demand for reliable sustainability information. While such a mandate can improve the credibility and standardization of sustainability information, it also introduces significant costs. Given the limited empirical evidence on mandatory sustainability assurance, we investigate this issue using the European context, where the Non-Financial Reporting Directive required sustainability reporting, but only a few countries mandated sustainability assurance. We find that the assurance mandate is associated with increased assurance timeliness, particularly for firms that combine financial and sustainability information in one report, firms with lower sustainability performance, and smaller firms. The mandate is also associated with an expanded assurance scope and a higher likelihood of the same auditor being used for both financial and sustainability reports in firms with combined reporting. In firms with lower sustainability performance, it is linked to an expanded assurance scope and a reduced likelihood of using a Big 4 assurance provider. For smaller firms, the mandate is associated with an expanded assurance scope. Overall. our results show that mandatory sustainability assurance results in more harmonized assurance practices and provider choices across different types of firms.
Time and Location: 10:00 AM (GMT+8), Room A423 (School of Management)
Language: Bilingual (Chinese and English)