Climate change mitigation: Carbon assurance and reporting integrity

Binh Bui, Muhammad Nurul Houqe, Mahbub Zaman*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


Concern about climate change has increased the pressure on firms to be accountable for social impact and to report on environmental, social and governance (ESG) performance. Focusing on the view that sustainability-oriented firms are likely to consider wider stakeholder interests and pursue high financial reporting integrity, this paper examines the association between carbon assurance and earnings management. Using a sample of firms listed on the New York Stock Exchange, we find voluntary adoption of carbon assurance (level), carbon disclosure and gender diverse boards are negatively associated with earnings management. Additional tests using different components of carbon assurance (percent and verification) confirm our main results. Our results suggest that firms that voluntarily invest in carbon assurance, carbon disclosure and gender diverse boards are less likely to engage in earnings management and thus have higher reporting integrity. This aligns with the view that firms' ethical concerns translate into higher quality reporting.

Original languageEnglish
Number of pages15
JournalBusiness Strategy and the Environment
Publication statusE-pub ahead of print - 5 Jun 2021

Bibliographical note

Publisher Copyright:
© 2021 ERP Environment and John Wiley & Sons Ltd.

Copyright 2021 Elsevier B.V., All rights reserved.


  • carbon assurance
  • disclosure
  • earnings management
  • reporting quality
  • sustainability


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