Rational purpose requirement and sustainability reporting assurance

Abstract

PURPOSE : This paper aims to investigate views of sustainable reporting (SR) stakeholders on the purpose of sustainability reporting assurance (SRA) and on the potential of the rational purpose requirement (RPR) to promote SRA as an accountability mechanism. DESIGN/METHODOLOGY/APPROACH : The study adopts a multiphase research approach. Data collection methods comprise a Q-methodology survey, roundtable discussions and semistructured interviews. Four stakeholder groups were involved in the study: report preparers, assurance providers (APs), investor users and social/environmental users. FINDINGS : The authors found that stakeholders hold diverse ideologically-based views on the purpose of SRA and lack critical reflection regarding SRA. By positioning APs as traditional intellectuals, four indicators (compliance with established norms, reinforcement of established practices, prioritization of own and corporate interests over broader interests and upholding of existing power structures) showed that the potential of the RPR to promote SRA as an accountability mechanism is limited. PRACTICAL IMPLICATIONS : The findings point to the need for stronger mandatory regulation, increased involvement of a wider range of stakeholders and improved professional education and training. Professional training should promote critical thinking and a deeper understanding of SRA, rather than mere compliance with standards. SOCIAL IMPLICATIONS : The study makes regulators and professional bodies more aware of the influence practical and commercial realities have on regulation, and the paradoxical effect of regulation on their public interest objectives. ORIGINALITY/VALUE : The study investigates the RPR in the mostly unregulated SRA environment and illuminates public interest considerations in SRA through insights into the potential of the RPR to promote SRA as an accountability mechanism.