Rohani, A., Jabbour, M. orcid.org/0000-0002-7078-5726 and Aliyu, S. (2023) Corporate incentives for obtaining higher level of carbon assurance: seeking legitimacy or improving performance? Journal of Applied Accounting Research, 24 (4). pp. 701-725. ISSN 0967-5426
Abstract
Purpose
With the growing attention around carbon emissions disclosure, the demand for external carbon assurance on emissions reports has been increasing by stakeholders as it provides additional credibility and confidence. This study investigates the association between the higher level of external carbon assurance and improvement in a firm's carbon emissions. It provides an understanding of corporate incentives for obtaining a higher level of carbon assurance, particularly in relation to carbon performance enhancements.
Design/methodology/approach
Data are collected from 170 US companies for the period 2012–2017 and are analysed using a change analysis. Generalised method of moment (GMM) is used to address endogeneity.
Findings
Following the rationales taken by legitimacy and “outside-in” management views, the findings reveal that a higher level of carbon assurance (i.e. reasonable assurance) marginally improves firms' carbon performance (i.e. reported carbon emissions). This is consistent with “outside-in” management view suggesting that a higher level of assurance could be utilised as a tool for accessing more information about stakeholders' needs and concerns, which can be useful in enhancing carbon performance.
Research limitations/implications
The findings are generalisable to US firms and may not extend to other contexts.
Practical implications
The implication of this study for companies is that a high level of sustainability assurance is a useful tool to access detailed information about stakeholder concerns, of which internalisation can help to marginally improve carbon performance. For policymakers, the insights into and enhanced understanding of the incentives for obtaining carbon assurance can help policymakers to develop effective policies and initiatives for carbon assurance. Considering the possible improvements in carbon performance when obtaining a high level of sustainability verification, governments need to consider mandating carbon assurance.
Originality/value
This study extends the existing studies of assurance in sustainability context as well as in carbon context by explaining why companies voluntarily get expensive external verification (i.e. higher level of assurance) of their carbon emissions disclosure. This study responds to calls in the literature for empirical research investigating the association between environmental performance and external assurance with a focus on level of assurance.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2022, Emerald Publishing Limited. This is an author-produced version of a paper subsequently published in Journal of Applied Accounting Research. This version is distributed under the terms of the Creative Commons Attribution-NonCommercial Licence (http://creativecommons.org/licenses/by-nc/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. You may not use the material for commercial purposes. |
Keywords: | Carbon performance; levels of carbon assurance; legitimacy view; outside-in management view |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Management School (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 19 Dec 2022 14:24 |
Last Modified: | 26 Sep 2024 11:12 |
Status: | Published |
Publisher: | Emerald |
Refereed: | Yes |
Identification Number: | 10.1108/JAAR-03-2022-0055 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:194342 |