IDEAS home Printed from https://ideas.repec.org/a/wly/sustdv/v29y2021i5p793-809.html
   My bibliography  Save this article

Do investors value the voluntary assurance of sustainability information? Evidence from the Spanish stock market

Author

Listed:
  • Carmelo Reverte

Abstract

This study examines in the Spanish setting whether, after the passing of the European Directive 2014/95/UE, investors value positively the voluntary assurance of sustainability reports corresponding to the period 2014–2017 for a sample of listed companies. It also analyzes the valuation by investors of a series of assurance characteristics such as its quality, level of application (reasonable/high vs. moderate/limited), scope (complete vs. partial), and the type of assurance provider (accounting vs. non‐accounting firms). Our results find that investors reward firms that adopt external sustainability assurance. Furthermore, we document that investors value to a greater extent those assurance statements with a broader scope, a high/reasonable level of assurance, and with a better quality. Our results are relevant for companies, investors, regulators, and practitioners, and justify the pertinence of the recent Law 11/2018 that places Spain as a European reference by requiring a mandatory assurance of sustainability information in order to increase its reliability and comparability.

Suggested Citation

  • Carmelo Reverte, 2021. "Do investors value the voluntary assurance of sustainability information? Evidence from the Spanish stock market," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(5), pages 793-809, September.
    • Handle: RePEc:wly:sustdv:v:29:y:2021:i:5:p:793-809
    DOI: 10.1002/sd.2157
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/sd.2157
    Download Restriction: no
    File URL: https://libkey.io/10.1002/sd.2157?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Adriana Rossi & Lara Tarquinio, 2017. "An analysis of sustainability report assurance statements," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 32(6), pages 578-602, June.
    2. O'Dwyer, Brendan & Owen, David L., 2005. "Assurance statement practice in environmental, social and sustainability reporting: a critical evaluation," The British Accounting Review, Elsevier, vol. 37(2), pages 205-229.
    3. Theodore J. Mock & Christiane Strohm & Kevin M. Swartz, 2007. "An Examination of Worldwide Assured Sustainability Reporting," Australian Accounting Review, CPA Australia, vol. 17(41), pages 67-77, March.
    4. Lars Hassel & Henrik Nilsson & Siv Nyquist, 2005. "The value relevance of environmental performance," European Accounting Review, Taylor & Francis Journals, vol. 14(1), pages 41-61.
    5. Natalia Vaz Ogando & Silvia Ruiz Blanco & Belen Fernandez-Feijoo, 2018. "A Provider’s Approach to the Assurance Market of Sustainability Reports in Spain," Administrative Sciences, MDPI, vol. 8(3), pages 1-27, June.
    6. Eun-Hee Kim & Thomas P. Lyon, 2015. "Greenwash vs. Brownwash: Exaggeration and Undue Modesty in Corporate Sustainability Disclosure," Organization Science, INFORMS, vol. 26(3), pages 705-723, June.
    7. Carla Rhianon Edgley & Michael John Jones & Jill Frances Solomon, 2010. "Stakeholder inclusivity in social and environmental report assurance," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 23(4), pages 532-557, May.
    8. Ignace De Beelde & Sanne Tuybens, 2015. "Enhancing the Credibility of Reporting on Corporate Social Responsibility in Europe," Business Strategy and the Environment, Wiley Blackwell, vol. 24(3), pages 190-216, March.
    9. Olga Hawn & Ioannis Ioannou, 2016. "Mind the gap: The interplay between external and internal actions in the case of corporate social responsibility," Strategic Management Journal, Wiley Blackwell, vol. 37(13), pages 2569-2588, December.
    10. Kim, Yongtae & Li, Haidan & Li, Siqi, 2014. "Corporate social responsibility and stock price crash risk," Journal of Banking & Finance, Elsevier, vol. 43(C), pages 1-13.
    11. O'Dwyer, Brendan & Owen, David & Unerman, Jeffrey, 2011. "Seeking legitimacy for new assurance forms: The case of assurance on sustainability reporting," Accounting, Organizations and Society, Elsevier, vol. 36(1), pages 31-52, January.
    12. Michael Spence, 2002. "Signaling in Retrospect and the Informational Structure of Markets," American Economic Review, American Economic Association, vol. 92(3), pages 434-459, June.
    13. Ana Zorio & Maria A. García‐Benau & Laura Sierra, 2013. "Sustainability Development and the Quality of Assurance Reports: Empirical Evidence," Business Strategy and the Environment, Wiley Blackwell, vol. 22(7), pages 484-500, November.
    14. Olivier Boiral & Yves Gendron, 2011. "Sustainable Development and Certification Practices: Lessons Learned and Prospects," Business Strategy and the Environment, Wiley Blackwell, vol. 20(5), pages 331-347, July.
    15. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    16. Jennifer Martínez‐Ferrero & Isabel‐María García‐Sánchez & Emiliano Ruiz‐Barbadillo, 2018. "The quality of sustainability assurance reports: The expertise and experience of assurance providers as determinants," Business Strategy and the Environment, Wiley Blackwell, vol. 27(8), pages 1181-1196, December.
    17. Geert Braam & Roy Peeters, 2018. "Corporate Sustainability Performance and Assurance on Sustainability Reports: Diffusion of Accounting Practices in the Realm of Sustainable Development," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(2), pages 164-181, March.
    18. Stephan Fuhrmann & Christian Ott & Elisabeth Looks & Thomas W. Guenther, 2017. "The contents of assurance statements for sustainability reports and information asymmetry," Accounting and Business Research, Taylor & Francis Journals, vol. 47(4), pages 369-400, June.
    19. Giacomo Manetti & Lucia Becatti, 2009. "Assurance Services for Sustainability Reports: Standards and Empirical Evidence," Journal of Business Ethics, Springer, vol. 87(1), pages 289-298, April.
    20. Leuz, C & Verrecchia, RE, 2000. "The economic consequences of increased disclosure," Journal of Accounting Research, Wiley Blackwell, vol. 38, pages 91-124.
    21. Diamond, Douglas W & Verrecchia, Robert E, 1991. "Disclosure, Liquidity, and the Cost of Capital," Journal of Finance, American Finance Association, vol. 46(4), pages 1325-1359, September.
    22. Mark Bagnoli & Susan G. Watts, 2017. "Voluntary Assurance of Voluntary CSR Disclosure," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(1), pages 205-230, February.
    23. Mary E. Barth & Greg Clinch, 2009. "Scale Effects in Capital Markets‐Based Accounting Research," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 36(3‐4), pages 253-288, April.
    24. Mary E. Barth & Greg Clinch, 2009. "Scale Effects in Capital Markets-Based Accounting Research," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 36(3-4), pages 253-288.
    25. Kristy Hodge & Nava Subramaniam & Jenny Stewart, 2009. "Assurance of Sustainability Reports: Impact on Report Users' Confidence and Perceptions of Information Credibility," Australian Accounting Review, CPA Australia, vol. 19(3), pages 178-194, September.
    26. Craig Deegan & Barry J. Cooper & Marita Shelly, 2006. "An Investigation of TBL Report Assurance Statements: Australian Evidence," Australian Accounting Review, CPA Australia, vol. 16(39), pages 2-18, July.
    27. Michelon, Giovanna & Pilonato, Silvia & Ricceri, Federica, 2015. "CSR reporting practices and the quality of disclosure: An empirical analysis," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 33(C), pages 59-78.
    28. Rachel N. Birkey & Giovanna Michelon & Dennis M. Patten & Jomo Sankara, 2016. "Does assurance on CSR reporting enhance environmental reputation? An examination in the U.S. context," Accounting Forum, Taylor & Francis Journals, vol. 40(3), pages 143-152, September.
    29. Robyn Moroney & Carolyn Windsor & Yong Ting Aw, 2012. "Evidence of assurance enhancing the quality of voluntary environmental disclosures: an empirical analysis," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 52(3), pages 903-939, September.
    30. Cho, Charles H. & Laine, Matias & Roberts, Robin W. & Rodrigue, Michelle, 2015. "Organized hypocrisy, organizational façades, and sustainability reporting," Accounting, Organizations and Society, Elsevier, vol. 40(C), pages 78-94.
    31. Clarkson, Peter M. & Li, Yue & Richardson, Gordon D. & Vasvari, Florin P., 2011. "Does it really pay to be green? Determinants and consequences of proactive environmental strategies," Journal of Accounting and Public Policy, Elsevier, vol. 30(2), pages 122-144, March.
    32. Isabel Lourenço & Manuel Branco & José Curto & Teresa Eugénio, 2012. "How Does the Market Value Corporate Sustainability Performance?," Journal of Business Ethics, Springer, vol. 108(4), pages 417-428, July.
    33. Miriam Corrado & Paola Demartini & John Dumay, 2019. "Assurance on Integrated Reporting: A Critical Perspective," CSR, Sustainability, Ethics & Governance, in: Samuel O. Idowu & Mara Del Baldo (ed.), Integrated Reporting, chapter 0, pages 199-217, Springer.
    34. Laura Sierra & Ana Zorio & María A. García‐Benau, 2013. "Sustainable Development and Assurance of Corporate Social Responsibility Reports Published by Ibex‐35 Companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 20(6), pages 359-370, November.
    35. Amanda Ball & David L. Owen & Rob Gray, 2000. "External transparency or internal capture? The role of third‐party statements in adding value to corporate environmental reports1," Business Strategy and the Environment, Wiley Blackwell, vol. 9(1), pages 1-23, January.
    36. Alberto Fonseca, 2010. "How credible are mining corporations' sustainability reports? a critical analysis of external assurance under the requirements of the international council on mining and metals," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 17(6), pages 355-370, November.
    37. Giacomo Manetti & Simone Toccafondi, 2012. "The Role of Stakeholders in Sustainability Reporting Assurance," Journal of Business Ethics, Springer, vol. 107(3), pages 363-377, May.
    38. Edgley, Carla & Jones, Michael J. & Atkins, Jill, 2015. "The adoption of the materiality concept in social and environmental reporting assurance: A field study approach," The British Accounting Review, Elsevier, vol. 47(1), pages 1-18.
    39. Han, Bong H. & Manry, David, 2004. "The value-relevance of R&D and advertising expenditures: Evidence from Korea," The International Journal of Accounting, Elsevier, vol. 39(2), pages 155-173.
    40. Katrin Hummel & Christian Schlick & Matthias Fifka, 2019. "The Role of Sustainability Performance and Accounting Assurors in Sustainability Assurance Engagements," Journal of Business Ethics, Springer, vol. 154(3), pages 733-757, February.
    41. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    42. Ans Kolk & Paolo Perego, 2010. "Determinants of the adoption of sustainability assurance statements: an international investigation," Business Strategy and the Environment, Wiley Blackwell, vol. 19(3), pages 182-198, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rodrigo Zeidan, 2022. "Why don't asset managers accelerate ESG investing? A sentiment analysis based on 13,000 messages from finance professionals," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3028-3039, November.
    2. Thomas A. Tsalis & Maria Terzaki & Dimitrios Koulouriotis & Konstantinos P. Tsagarakis & Ioannis E. Nikolaou, 2023. "The nexus of United Nations' 2030 Agenda and corporate sustainability reports," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(2), pages 784-796, April.
    3. Sandra Escamilla‐Solano & Antonio Fernández‐Portillo & Mari Cruz Sánchez‐Escobedo & Carmen Orden‐Cruz, 2024. "Corporate social responsibility disclosure: Mediating effects of the economic dimension on firm performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(1), pages 709-718, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Olivier Boiral & Iñaki Heras-Saizarbitoria & Marie-Christine Brotherton & Julie Bernard, 2019. "Ethical Issues in the Assurance of Sustainability Reports: Perspectives from Assurance Providers," Journal of Business Ethics, Springer, vol. 159(4), pages 1111-1125, November.
    2. Bradbury, Michael & Jia, Jing & Li, Zhongtian, 2022. "Corporate social responsibility committees and the use of corporate social responsibility assurance services," Journal of Contemporary Accounting and Economics, Elsevier, vol. 18(2).
    3. Natalia Vaz Ogando & Silvia Ruiz Blanco & Belen Fernandez-Feijoo, 2018. "A Provider’s Approach to the Assurance Market of Sustainability Reports in Spain," Administrative Sciences, MDPI, vol. 8(3), pages 1-27, June.
    4. Carolin Baier & Max Göttsche & Andreas Hellmann & Frank Schiemann, 2022. "Too Good To Be True: Influencing Credibility Perceptions with Signaling Reference Explicitness and Assurance Depth," Journal of Business Ethics, Springer, vol. 178(3), pages 695-714, July.
    5. Olivier Boiral & Iñaki Heras-Saizarbitoria & Marie-Christine Brotherton, 2019. "Assessing and Improving the Quality of Sustainability Reports: The Auditors’ Perspective," Journal of Business Ethics, Springer, vol. 155(3), pages 703-721, March.
    6. Warren Maroun, 2020. "A Conceptual Model for Understanding Corporate Social Responsibility Assurance Practice," Journal of Business Ethics, Springer, vol. 161(1), pages 187-209, January.
    7. Patrick Velte & Martin Stawinoga, 2017. "Empirical research on corporate social responsibility assurance (CSRA): A literature review," Journal of Business Economics, Springer, vol. 87(8), pages 1017-1066, November.
    8. Katrin Hummel & Christian Schlick & Matthias Fifka, 2019. "The Role of Sustainability Performance and Accounting Assurors in Sustainability Assurance Engagements," Journal of Business Ethics, Springer, vol. 154(3), pages 733-757, February.
    9. Kılıç, Merve & Kuzey, Cemil & Uyar, Ali, 2021. "An international investigation on assurance of integrated reports: Institutions, assurance quality, and assurers," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 42(C).
    10. Karaman, Abdullah S. & Orazalin, Nurlan & Uyar, Ali & Shahbaz, Muhammad, 2021. "CSR achievement, reporting, and assurance in the energy sector: Does economic development matter?," Energy Policy, Elsevier, vol. 149(C).
    11. Genevé Richard & Elza Odendaal, 2020. "Integrated reporting assurance practices—a study of South African firms," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 17(4), pages 245-266, December.
    12. Elies Seguí-Mas & Fernando Polo-Garrido & Helena María Bollas-Araya, 2018. "Sustainability Assurance in Socially-Sensitive Sectors: A Worldwide Analysis of the Financial Services Industry," Sustainability, MDPI, vol. 10(8), pages 1-21, August.
    13. Isabel‐María García‐Sánchez, 2020. "Drivers of the CSR report assurance quality: Credibility and consistency for stakeholder engagement," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(6), pages 2530-2547, November.
    14. Thomas Kaspereit & Kerstin Lopatta, 2013. "The Value Relevance of SAM's Corporate Sustainability Ranking and GRI Sustainability Reporting in the European Stock Markets," ZenTra Working Papers in Transnational Studies 19 / 2013, ZenTra - Center for Transnational Studies, revised Oct 2013.
    15. Jennifer Martínez‐Ferrero & Isabel‐María García‐Sánchez & Emiliano Ruiz‐Barbadillo, 2018. "The quality of sustainability assurance reports: The expertise and experience of assurance providers as determinants," Business Strategy and the Environment, Wiley Blackwell, vol. 27(8), pages 1181-1196, December.
    16. Paolo Perego & Ans Kolk, 2012. "Multinationals’ Accountability on Sustainability: The Evolution of Third-party Assurance of Sustainability Reports," Journal of Business Ethics, Springer, vol. 110(2), pages 173-190, October.
    17. Quick, Reiner & Gauch, Kevin, 2021. "Is assurance on risk management systems relevant for bankers’ decisions?," Advances in accounting, Elsevier, vol. 55(C).
    18. Belen Fernandez‐Feijoo & Silvia Romero & Silvia Ruiz, 2018. "Financial Auditor and Sustainability Reporting: Does it matter?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(3), pages 209-224, May.
    19. Vaz Ogando, Natalia & Ruiz Blanco, Silvia & Fernandez-Feijoo Souto, Belen, 2018. "El mercado de verificación de las memorias de sostenibilidad en España: un análisis desde la perspectiva de la demanda," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 21(1), pages 48-62.
    20. Carlos Larrinaga & Adriana Rossi & Mercedes Luque-Vilchez & Manuel Núñez-Nickel, 2020. "Institutionalization of the Contents of Sustainability Assurance Services: A Comparison Between Italy and United States," Journal of Business Ethics, Springer, vol. 163(1), pages 67-83, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:sustdv:v:29:y:2021:i:5:p:793-809. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-1719 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.