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The Effect of the Level of Sustainability Assurance on Investor Judgements

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  • Wei Chen
  • Kerry A. Humphreys
  • Ken T. Trotman

Abstract

Recent climate‐related regulatory and standard setting changes include mandatory sustainability reporting and phasing in of mandatory assurance. These changes highlight the need to understand the potential impacts of varying levels of assurance of sustainability disclosures. Our study examines the effect on investors' judgements of the level of assurance (limited, hybrid, reasonable) of sustainability disclosures under varying combinations of financial and sustainability performance. Our results suggest that the benefit of different levels of sustainability assurance can depend on both the financial performance of the company and the perceived credibility of the sustainability information provided.

Suggested Citation

  • Wei Chen & Kerry A. Humphreys & Ken T. Trotman, 2026. "The Effect of the Level of Sustainability Assurance on Investor Judgements," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 66(1), pages 904-916, March.
    • Handle: RePEc:bla:acctfi:v:66:y:2026:i:1:p:904-916
    DOI: 10.1111/acfi.70142
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    References listed on IDEAS

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