Sustainability Performance and Assurance: Influence on Reputation
- First Online:
- 79 Downloads
The positive impact of sustainability on reputation has been assumed but not sufficiently examined. This study probes the veracity of these claims by applying legitimacy and signaling perspectives to examine whether sustainability performance and assurance contribute to corporate reputation. We find superior sustainability performance has a positive association with sustainability reputation. Companies with better performance are also more likely to obtain external assurance of their sustainability disclosure, but assurance does not directly affect reputation. Assurance appears to be a managerial tool associated with the congruence of internal processes rather than a differentiating signal to external stakeholders.
Keywordsassurance legitimacy signaling theory sustainability reporting sustainability reputation
- AccountAbility (2008) AA1000 Assurance Standard 2008, AccountAbility, London.Google Scholar
- Aguilera-Caracuel, J., Aragón-Correa, J., Hurtado-Torres, N. and Rugman, A. (2012) ‘The effects of institutional distance and headquarters’ financial performance on the generation of environmental standards in multinational companies’, Journal of Business Ethics, 105 (4), 461–474.CrossRefGoogle Scholar
- Al-Tuwaijri, S., Christensen, T.E. and Hughes, K.E. (2003) ‘The relations among environmental disclosure, environmental performance, and economic performance: A simultaneous equations approach’, Accounting, Organizations and Society, 29 (5), 447–471.Google Scholar
- Brandlogic (2011) ‘Brandlogic to present inaugural sustainability leadership report’, http://www.prnewswire.co.uk/cgi/news/release?id=330840, accessed 29 March, 2015.
- Economist (2012) ‘Schumpeter: Good business; nice beaches’, 19 May, p. 76.Google Scholar
- Fombrun, C.J. (1996) Reputation: Realizing Value from the Corporate Image, Harvard Business School Press, Boston, MA.Google Scholar
- Gibson, D., Gonzales, J.L. and Castanon, J. (2006) ‘The importance of reputation and the role of public relations’, Public Relations Quarterly, 51 (3), 15–18.Google Scholar
- IAASB (International Auditing and Assurance Standards Board) (2011) ‘Proposed international standard on assurance engagements’, http://www.ifac.org/sites/default/files/publications/exposure-drafts/IAASB_ISAE_3000_ED.pdf, accessed 31 March, 2015.
- Kenny, D.A. (2015) ‘Measuring model fit’, http://davidakenny.net/cm/fit.htm, accessed 31 March, 2015.
- Kenny, D.A., Kaniskan, B. and McCoach, D.B. (2014) ‘The performance of RMSEA in models with small degrees of freedom’, Sociological Methods & Research 1–22.Google Scholar
- Kolk, A. and Perego, P. (2010) ‘Determinants of the adoption of sustainability assurance statements: An international investigation’, Business Strategy and the Environment, 19 (3), 182–198.Google Scholar
- KPMG (2008) ‘KPMG international survey of corporate responsibility reporting’, http://www.kpmg.com/global/en/issuesandinsights/articlespublications/pages/sustainability-corporate-responsibility-reporting-2008.aspx, accessed 31 March, 2015.
- KPMG (2011) ‘Corporate sustainability: A progress report’, http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/corporate-sustainability-v2.pdf, accessed 31 March, 2015.
- Lubin, D.A. and Esty, D.C. (2010) ‘The sustainability imperative’, Harvard Business Review, 88 (5), 42–50.Google Scholar
- Martinov-Bennie, N., Frost, G. and Soh, D.S. (2012) ‘Assurance on sustainability reporting: State of play and future directions’, in, S. Jones and J. Ratnatunga (eds.), Contemporary Issues in Sustainability Accounting, Assurance and Reporting, Emerald Group Publishing, Bingley, UK, pp. 267–283.Google Scholar
- Mathews, M.R. (1993) Socially Responsible Accounting, Chapman and Hall, London.Google Scholar
- Nidumolu, R., Prahalad, C.K. and Rangaswami, M.R. (2009) ‘Why sustainability is now the key driver of innovation’, Harvard Business Review, 87 (9), 56–64.Google Scholar
- Schumacker, R.E. and Lomax, R.G. (2004) A Beginner’s Guide to Structural Equation Modeling, Lawrence Erlbaum Associates, Mahwah, NJ.Google Scholar
- Shrivastava, P. (1995) ‘The role of corporations in achieving ecological sustainability’, Academy of Management Review, 20 (4), 936–960.Google Scholar
- Suchman, M.C. (1995) ‘Managing legitimacy: Strategic and institutional approaches’, Academy of Management Review, 20 (3), 571–610.Google Scholar