How sustainability report preparers and assurance providers frame sustainability assurance quality – an interview study

Despite sustainability reporting offering stakeholders access to an entity’s non-financial performance, they remain in disagreement over the quality of the reported sustainability data (Farooq & De Villiers, 2019a) and the potential for hidden “greenwash” intentions (Farooq, Azantouti, & Zaman, 2024). In response, companies have begun to engage with external assurance providers to enhance the credibility of their sustainability reports (Yan, Jia, Chen, & Yan, 2022). The main objective of sustainability assurance is to improve the credibility and reliability of sustainability reports (Simnett, Vanstraelen, & Chua, 2009b). Assuring a company’s sustainability reports is currently unregulated in most jurisdictions (Farooq et al., 2024). There is a lack of consensus on the quality of sustainability assurance engagement (Manetti & Becatti, 2009; O’Dwyer & Owen, 2005). Broadly, the scopes and objectives of assurance engagements are determined by the market forces of demand and supply (Farooq & De Villiers, 2017; Simnett, Nugent, & Huggins, 2009a). The current sustainability assurance market has given rise to a diverse landscape (Manetti & Toccafondi, 2012) and one that is evolving (Kolk & Perego, 2010).

The literature identifies a range of potential impediments to adopting sustainability assurance, for example, the high costs of the engagement (Emma, Ruiz-Barbadillo, & Martínez-Ferrero, 2024), the undetermined added value of adoption (Ruiz-Barbadillo & Martinez-Ferrero, 2023), the lack of regulatory pressure (Channuntapipat, Samsonova-Taddei, & Turley, 2019) and different expectations from varied stakeholders (Simoni, Bini, & Bellucci, 2020). Moreover, sustainability assurance is influenced by management in reporting companies (Owen, Swift, Humphrey, & Bowerman, 2000; O’Dwyer & Owen, 2007; Smith, Haniffa, & Fairbrass, 2011). Furthermore, there is substantial variability in the assurance scope and independence of the assurance providers. As a result, a global reluctance to sustainability assurance concerns has emerged.

The evolution of sustainability assurance in developed economies dominates existing research areas (Maroun, 2022; Xiao & Shailer, 2021). Increasing numbers of researchers suggest that a comprehensive investigation of sustainability assurance practices in emerging economies is warranted (Ruiz-Barbadillo & Martinez-Ferrero, 2023; Farooq et al., 2024; Emma et al., 2024; Boiral, Heras-Saizarbitoria, Brotherton, & Bernard, 2019a). The Chinese context is emphasised in our study because it is an example that indicates a reluctance to adopt sustainability assurance. As one of the world’s most vibrant economies, China is a major player in the global sustainability market (Shen, Lin, Han, & Wu, 2023). KPMG (2024) reports that the recent increase in global sustainability disclosures is significantly associated with China’s mandatory sustainability reporting requirements. However, only a few Chinese companies voluntarily assure their sustainability reports. Currently, sustainability assurance is in a voluntary adoption phase in China; however, stock exchanges and regulatory departments encourage reporting companies to ensure the accuracy of their sustainability disclosures (Shen et al., 2023). Thus, the reporting companies are facing pressure to assure their sustainability reports are accurate. Assurance providers are facing challenges in providing assurance services. Accountancy firms and industry experts are the primary market participants in China (Shen et al., 2023). How sustainability reporting preparers and assurance providers perceive sustainability assurance is an important research question because achieving the objective only occurs when two parties have a common understanding of the quality of sustainability assurance.

We are motivated to conduct this study for the following reasons. First, there remains little consensus on the concept of sustainability assurance and its quality. Sustainability assurance quality reflects the value of the assurance service provided (Xiao & Shailer, 2021; Farooq & De Villiers, 2019b). The perceptions of sustainability assurance quality can vary depending on the eyes one looks through (Gillet-Monjarret & Riviere-Giordano, 2017). This is because the nature of sustainability is stakeholder-oriented (O’Dwyer & Owen, 2007). Past literature study sustainability assurance quality based on the content analysis of the assurance statements (Emma et al., 2024; Ruiz-Barbadillo & Martinez-Ferrero, 2023), comparisons among different assurance providers (Channuntapipat et al., 2019; Martínez-Ferrero et al., 2018; Farooq & De Villiers, 2019a) and using the financial audit concept in non-financial assurance studies (Hummel, Schlick, & Fifka, 2019). However, debates arise about the drawbacks of these applications. For example, the relevance of the information provided in the assurance statement to stakeholders is argued (Emma et al., 2024; Maroun, 2019), homogenised services provided by different types of assurance providers are claimed (Bouten & Hoozée, 2024; Boiral, Heras-Saizarbitoria, & Brotherton, 2019b), and there is inappropriate application of the financial audit concept into voluntary settings (Simnett et al., 2009b). As a result, the absence of clear views of sustainability assurance quality challenges the client companies when purchasing this assurance service. Farooq et al. (2024) and Gillet-Monjarret and Riviere-Giordano (2017) suggest that theoretical frameworks for qualitative research are needed to understand sustainability assurance in cooperative communities.

Second, most existing studies rely on data predating mandatory sustainability requirements, and the implications and impacts of research findings on the current sustainability market are declining. The regulatory landscape for sustainability reporting and assurance has undergone significant changes over the past decade (Christensen, Hail, & Leuz, 2021). Independent standard-setters, such as the International Auditing and Assurance Standards Board (IAASB ^[1]), have announced sustainability reporting and assurance standards, for example, the ISSA 5000, developed by the International Standard on Sustainability Assurance (ISSA), since 2023. Moreover, several countries and regions have announced mandatory sustainability reporting and assurance requirements. For instance, EU companies are required to report their sustainability data mandatorily starting in 2025 ^[2]. The Chinese government setup “Dual carbon goals (DCG ^[3])” to boost firms’ sustainable development. On 8 February 2024, the three main Chinese stock exchanges – BSE, SSE and SZSE – announced a mandatory environmental, social, and governance (ESG) reporting requirement ^[4] for listed companies. As a major driver of sustainability activities, the response to coercive pressure and its impacts need further investigation.

Furthermore, existing studies suggest that the potential undue influence of the reporting company’s management may override the sustainability assurance process (Hickman & Cote, 2019; O’Dwyer & Owen, 2005). Adams and Evans (2004) identify that an audit expectation gap arises from the pressure from management conflicts within reporting companies, which conflicts with the fundamental role of external assurance – to verify the reliability and credibility of disclosed data. Existing studies provide valuable insights into sustainability assurance and aim to address concerns associated with adopting this approach. However, existing literature focuses on either the demand or supply side. Thus, Tsang, Frost, and Cao (2023) and Maroun (2022) recommend that more exploratory studies be conducted directly with companies and assurance providers to refine the conclusions of previous studies, thereby enhancing the governing process and assurance engagement. Maroun (2019), Farooq and De Villiers (2017) and Cohen and Simnett (2015) also call for fieldwork to identify the perceptions of sustainability assurance quality.

Thus, considering the gaps in the extant literature and the stagnant Chinese sustainability assurance market, we respond to the call for exploratory research in sustainability reporting and assurance (i.e. Free, Jones, & Tremblay, 2024; Farooq et al., 2024; Ruiz-Barbadillo & Martinez-Ferrero, 2023). We apply framing theory to explore the following research question: how do sustainability reporting preparers and assurance providers perceive the quality of sustainability assurance?

We draw on the applications of framing theory by Maroun (2019) in the sustainability assurance literature and Durocher and Georgiou (2022) in the financial audit literature to develop a theoretical framework that guides our study and data collection. The theoretical framework involves three framing tasks (i.e. sense-making, naming and storytelling) (Durocher & Georgiou, 2022) during the diagnostic framing process, which focuses on identifying and defining problems (Maroun, 2019). It illustrates the framing process of assurance providers and report preparers towards sustainability assurance quality. Data collected from the interviews is analysed following the three stages of the grounded theory method (GTM): open, axial and selective (Williams & Moser, 2019).

Because of the exploratory nature of our study, a semi-structured interview method was used. A sample of 40 sustainability reporting preparers and assurance providers was collected to answer the research question. Twenty-nine (29) interviewees are sustainability reporting preparers, and 11 interviewees are assurance providers. In the sense-making task, our results show that all the assurance providers interviewed showed their care for the quality of sustainability assurance. In contrast, the results from the reporting preparers show that they did not pay much attention to the quality of sustainability assurance. Results from the naming task indicate that assurance providers highlight the high level of assurance quality achieved by following predetermined targets and prescribed procedures, while reporting preparers prioritise meeting the stakeholders’ requirements, including those of the client company. The results from the storytelling task show that both groups emphasise that the quality of sustainability reports enhances the quality of sustainability assurance. The qualifications of assurance providers are highlighted by reporting preparers, while assurance providers believe competence and professionalism are important factors in determining the quality of sustainability assurance. From their perspective, assurance providers emphasise that effective communication with client companies is associated with higher-quality and sustainability reporting, as preparers believe in presenting an assurance statement.

Our study sheds light on the stagnant sustainability assurance market and contributes new insights to the existing literature on sustainability assurance. First, we extend the framing theory in the sustainability assurance literature by integrating the applications of framing theory by Maroun (2019) and Durocher and Georgiou (2022). Our study differs from Maroun (2019) and Durocher and Georgiou (2022) in terms of the research objective and the application of the framing theory. Our study focuses on the view of sustainability assurance quality. At the same time, Maroun (2019) examines the reasons why companies decide to assure their integrated reports and Durocher and Georgiou (2022) study how financial statement users and standard setters make sense of accounting for goodwill. In terms of the application of the framing theory, Maroun (2019) employs the framing theory as a structured analytical tool, comprising three processes: diagnostic, prognostic and motivational, to organise views on the reasons for assurance, the need for changes to current practice and motivation for change. Durocher and Georgiou (2022) apply the concept of “framing” as a heuristic approach to enable financial statement users and standard setters to organise their understanding of accounting for goodwill through three interconnected acts: sense-making, naming and storytelling. The theoretical framework we developed considers both perspectives to understand perceptions of sustainability assurance quality by assurance providers and sustainability reporting preparers, as well as the process of forming such perceptions. It is useful for studying individuals’ perceptions of various topics and the process of forming such perceptions in any discipline. Our framework is also useful for guiding research design and data collection in qualitative studies.

Our study also differs from existing studies that focus on extrinsic motivations for ESG assurance, such as external regulatory pressures and stakeholders’ expectations (Li & Lu, 2020; Radhouane, Nekhili, Nagati, & Paché, 2020; Clarkson, Li, Richardson, & Tsang, 2019). We focus on the intrinsic motivations that arise from the distinct frame processes of key market participants in the ESG assurance practice. Additionally, while other studies in existing literature focus on either the demand or supply side (e.g. Bouten & Hoozée, 2024; Boiral et al., 2019a, b; Farooq & De Villiers, 2017; Simnett et al., 2009b), our study takes a different approach to integrate the two key sustainability assurance players’ perceptions. The evidence from both sides provides a comprehensive and divergent view of how they perceive the quality of sustainability assurance, which is crucial for understanding current sustainability assurance practices and offers valuable insights for improvement. Such divergent views can also help stakeholders from multiple backgrounds appreciate the issues in current ESG assurance practice. Thus, we contribute to the literature by adding new knowledge of “what” sustainability assurance quality is, “why” it is important, and “how” to promote sustainability assurance quality from the point of view of assurance providers and sustainability reporting preparers. Our findings also extend the theory of audit expectation gap (Hassink, Bollen, Meuwissen, & de Vries, 2009) and legitimacy gap theory (Emma et al., 2024) by addressing the issue of sustainability assurance as part of the dialogue between the reporting company and its stakeholders.

Due to the multiple interpretations of sustainability, the concepts of sustainability assurance vary among different perspectives. The quality of sustainability assurance has been addressed in the literature to determine whether stakeholders’ requirements are satisfied; however, the extant literature presents diverse views on the matter. Presently, three common measurements are used to evaluate the quality of sustainability assurance, including a content analysis of assurance statements, comparing different assurance providers and applying the financial audit concept.

In past studies, sustainability assurance quality was not directly defined but rather measured by several proxies (Emma et al., 2024). Prior research evaluates the quality of sustainability assurance by examining the information provided in published sustainability assurance statements (e.g. García-Sánchez, 2020; Ruiz-Barbadillo & Martínez-Ferrero, 2020; Martínez-Ferrero et al., 2018; Zorio, García-Benau, & Sierra, 2013). The information in the assurance statement is used to evaluate the quality of the assurance process behind the published assurance statement. Existing studies (e.g. Ruiz-Barbadillo & Martinez-Ferrero, 2023; Hummel et al., 2019; Martínez-Ferrero et al., 2018; Perego & Kolk, 2012) rely on a content analysis of the assurance statement as a proxy for assurance quality. O’Dwyer and Owen (2005) developed an evaluative framework that has been adopted in several subsequent studies to measure sustainability assurance quality (Emma et al., 2024; Xiao & Shailer, 2021). In the absence of an agreement on the quality of sustainability assurance, a content analysis comparing the assurance statement with the key elements is helpful, as the assurance statement is the only visible outcome of the assurance process (Ruiz-Barbadillo & Martinez-Ferrero, 2023; Zorio et al., 2013).

Despite the assurance statement providing sufficient information on the quality of sustainability assurance (Emma et al., 2024), a significant drawback of the content analysis of the assurance statement is evident. The basic premise of this approach is that the more information disclosed in the assurance statement, the higher the quality of the assurance process (Ruiz-Barbadillo & Martínez-Ferrero, 2020; Zorio et al., 2013); as such, the approach is only useful when a comprehensive and separate assurance statement exists. Variations in current national sustainability assurance requirements allow assurance providers to present their opinions in diversified formats or scopes (O’Dwyer & Owen, 2005). Furthermore, the assurance statement can be embedded in the financial audit report if the client company integrates its sustainability and financial statements into an integrated reporting system (Maroun, 2019). As a result, the assurance statement can be different or even missing in some circumstances. To this extent, content analysis of assurance statements cannot be used as a reliable proxy for assurance quality in all instances.

Prior studies show that users of sustainability reports have varying perceptions of the quality of sustainability assurance (Perego & Kolk, 2012; Pflugrath, Roebuck, & Simnett, 2011; Hodge, Subramaniam, & Stewart, 2009; Perego, 2009), raising the question of whether this variation may be attributed to the differences between provider types (e.g. accountancy providers vs. non-accountancy providers). For example, accountancy providers enhance the quality of sustainability assurance as they are perceived as more independent, whereas non-accountancy providers are more relevant because their recommendations provide valuable insights into the client’s sustainability performance and improve stakeholder engagement (Perego & Kolk, 2012; Manetti & Toccafondi, 2012). Ballou, Chen, Grenier, and Heitger (2018) also suggest that assurance providers from traditional accounting firms are more likely to discover inaccuracies in past sustainability reports and prevent future errors. Therefore, as Michelon, Patten, and Romi (2019) suggested, the types of assurance providers affect the quality of sustainability reports.

Pflugrath et al. (2011) find that the perceived credibility of sustainability reporting is higher when a traditional (accounting) assuror assures it. More importantly, accounting firms, especially the Big 4, may provide higher quality assurance services than specialists and consulting firms due to their extensive experience in testing and analysing procedures to enhance data integrity (Clarkson et al., 2019). Consistent with the findings of Zorio et al. (2013) and Fernández-Feijóo-Souto, Romero, Ruiz-Blanco, and Sou (2012), Bollas-Araya et al. (2019) conclude that the quality of assurance statements is related to the type of assurors, with accountants providing higher quality. Furthermore, given that a diverse range of providers offer these services, the assurance statements disclosed are consequently heterogeneous in content, specifically in terms of engagement scope, standards applied, work undertaken and the level of assurance provided (Gürtürk & Hahn, 2016; Simnett et al., 2009a). This heterogeneity contributes to the uncertainties surrounding the quality of sustainability assurance work (Martínez-Ferrero et al., 2018).

Building on previous studies, Hummel et al. (2019) established a broader concept of sustainability assurance quality, drawing from the financial audit literature. Assurance quality is the joint probability that the assurors discover and report problematic issues in the client’s reporting system (DeAngelo, 1981). In addition to earlier attention on the breadth of sustainability assurance statements, Hummel et al. (2019) developed two key aspects of sustainability assurance related to discovery and reporting. They integrate these aspects into the broader concept of assurance quality to assess the assurance process and statements. However, institutional changes cannot be overlooked when considering the quality of sustainability assurance, as it is a key aspect of sustainability assurance quality (Simnett et al., 2009b). To meet certain mandatory reporting and assurance requirements, a clarifier and specific concept of sustainability assurance quality are still needed in both academic and practical fields (Hummel et al., 2019; Cohen & Simnett, 2015).

Farooq et al. (2024) point out that the popular theories adopted in extant literature include legitimacy, institutional and stakeholder theories. Several studies (e.g. Briem & Wald, 2018; Simoni et al., 2020; Thorne, Mahoney, & Manetti, 2014; Uyar, Kılıç, & Kuzey, 2021) combine different theories to explain sustainability reporting and assurance activities from different aspects. The rationale behind adopting combined theories is that sustainability assurance can be explained from diverse perspectives. As Aladwey, Elgharbawy, and Ganna (2021) and Simoni et al. (2020) suggest, legitimacy theory highlights the importance of satisfying powerful stakeholders to secure legitimacy, but it overlooks the influence of common stakeholders. Institutional theory closely correlates with legitimacy theory and stakeholder theory, as it emphasises the impact of the environments in which a company operates (Rowe & Guthrie, 2010).

Apart from the above accounting discipline theories, social science researchers widely apply framing theory to explain how social movements identify problems, propose remedies and drive change based on core framing tasks (Maroun, 2019; Benford & Snow, 2000). For example, Kaplan (2008) and Hargrave and Van De Ven (2006) examine how managers address changes in business operations and propose corresponding remedies. According to Goffman (1986), “frames” allow people to organise their understanding of the world and make sense of complex situations. Benford and Snow (2000) suggest three core tasks in the framing process. They are diagnostic, prognostic and motivational framing. Diagnostic framing allows individuals to identify and define problems. Prognostic framing articulates how a problem has been explained and proposes remedial actions (Goffman, 1986). Motivational framing provides a setting to encourage the implementation of ideas generated from diagnostic and prognostic framing (Bay, 2011). Framing involves three interconnected acts: sense-making, naming and storytelling (van Hulst & Yanow, 2016). Sense-making is a way for participants to organise cues they perceive from the world around them to guide their evolving understanding of reality (van Hulst & Yanow, 2016). Naming is the process of identifying differences between normal and abnormal, old and new, easy and difficult or any other relevant distinctions pertinent to the issue at stake (Durocher & Georgiou, 2022). It includes the process of selecting and categorising (Durocher & Georgiou, 2022). Storytelling presents a manner of presenting the situation and often involves the use of metaphors (van Hulst & Yanow, 2016).

The framing theory has also been employed in accounting literature. For example, Ascui and Lovell (2011) developed specific non-financial accounting practices based on multiple stakeholder frames. Maroun (2019) examines the reasons for companies to assure their integrated reports using multiple core framing tasks. Furthermore, Durocher and Georgiou (2022) examine how financial statement users and standard setters make sense of accounting for goodwill. Farooq et al. (2024) argue that adopting theories in the current literature is descriptive rather than empirical, i.e. applying a theoretical framework to guide analysis. Several theoretical frameworks have been proposed to offer insights into sustainability assurance (e.g. Durocher & Georgiou, 2022; Maroun, 2019; Smith et al., 2011). Maroun (2019) develops a theoretical framework based on the three processes (i.e. diagnostic, prognostic and motivational) of framing theory in the sustainability assurance context, while Durocher and Georgiou’s (2022) develop a theoretical framework based on the three acts (i.e. sense-making, naming and storytelling) of framing theory in the financial auditing context.

Maroun (2019) employs the framing theory as a structured analytical tool, and Durocher and Georgiou (2022) apply the concept of “framing” as a heuristic approach. The aim of our study was to explore the quality of sustainability assurance from the perspective of sustainability reporting preparers and assurance providers. Maroun’s (2019) diagnostic framing is relevant to our research objective because we aim to explore how sustainability reporting preparers and assurance providers identify and define the quality of sustainability assurance. Three interconnected aspects of the framing theory, as applied in Durocher and Georgiou (2022), are also relevant because they can help in understanding the process of forming views on sustainability assurance quality. We therefore integrate the application of framing theory, as proposed by Maroun (2019) and Durocher and Georgiou (2022), to guide our study and inform the development of interview questions. As suggested by van Hulst and Yanow (2016), sense-making is a way for participants to arrange cues they perceive from the world around them to guide their evolving perception of reality. We aim to understand the sense-making of assurance providers and reporting preparers on sustainability assurance quality. We focus on the interviewees’ attention to the quality of sustainability assurance and whether they care about its quality in the sense-making task. Naming is the process of selecting and categorising “whatever is relevant to the issue at stake” (Durocher & Georgiou, 2022, p. 6). It is also a process of establishing differences (Durocher & Georgiou, 2022). In the naming task, we aim to understand how the interviewees perceived sustainability assurance and its quality. Followed by sense-making and naming tasks, we aim to understand the interviewees’ storylines in the storytelling task. Storytelling is a way of presenting a situation with explanations and details. It is in play when interviewees justify their views on sustainability assurance quality and explain what needs to be done to ensure quality. The integrated theoretical framework is presented in Figure 1.

The research method of our study is face-to-face semi-structured interviews. The data population of our study is current and potential sustainability reporting preparers and assurance providers. From the demand side, based on findings from KPMG (2024), Shen et al. (2023), and Liao, Lin, and Zhang (2018), 1,492 Chinese companies disclosed sustainability reports. As of 2022, 5.25% of the report preparers assured that their reports were verified by third parties. Among these companies, Chinese state-owned enterprises (SOEs) are major participants in sustainability reporting and disclosures (Li, Hidayah, Lyu, & Lowe, 2023; Shen et al., 2023). From the supply side, over 110 accounting firms, sustainability consulting firms and professional bodies offer sustainability assurance (Shen et al., 2023). In addition to current market participants in the sustainability assurance market, the potential market participants who face coercive pressure in response to global and national sustainability reporting and assurance requirements are also included in the population. To ensure that the findings are based on the participants’ practical experience and a high-level understanding of the identified issues, the findings were not built on a single view from interviewees with identical backgrounds. We made two considerations for the sample selection from the above data population. First, selected reporting preparer interviewees must have several years of sustainability reporting and assurance experience in multiple sectors across different ownership structures, such as finance, manufacturing, mining or technology, SOEs or private companies. Second, the assurance providers cover all major types of providers in the Chinese market, including the Big 4, local accounting firms and sustainability/ESG consulting firms.

Interview instruments were created based on the theoretical framework developed in our study. During the diagnostic process, questions highlighted how interviewees make sense of sustainability assurance and its quality, as well as the reasons and concerns associated with the process. External assurance is sometimes viewed as merely a means to manage stakeholders’ expectations rather than an effective verification tool because of several weaknesses in the assurance process, including uncertain accuracy, varied standards of completeness and concerns about the reliability of systems, processes and data quality (Farooq et al., 2024). Stakeholders’ expectations and legitimacy are two major considerations driving the evolution of sustainability activities. As a result, the initial focus of our study is on responding to the coercive, normative and mimetic pressures arising from stakeholders’ expectations for sustainability assurance from Chinese companies. Thus, we developed the first two interview questions to respond to the above concerns. For example, we ask questions about whether sustainability reporting preparers and assurance providers prioritise sustainability assurance and its quality, and what actions they take to obtain high-quality sustainability assurance.

Additionally, we developed the interview instruments that consider the cost and benefits of investing in sustainability assurance engagement in a voluntary context. According to Free et al. (2024) and Simoni et al. (2020), legitimacy is maintained to the degree that the ritual function is sufficient to compensate for the lack of substance in the sustainability assurance process if stakeholders demand it. If the expected benefits of assurance engagement exceed the cost, the reporting companies may not adopt the service at a higher level of quality. As a result, the diagnostic frame deals with how the values and impacts of external assurance are perceived from both the demand and supply sides of the market. Full interview instruments with questions are provided in Appendix A.

The data collection process had undergone several steps. First, we submitted the interview instruments and related documents to the university where this study is based for ethics approval. The interview instruments included an information sheet about the study and participants’ rights and responsibilities, and (2) interview questions. The interview questions were designed based on the theoretical framework developed in our study. For example, questions highlighted how interviewees make sense of sustainability assurance and its quality, as well as the reasons and concerns involved in the process. There were no “right” or “wrong” responses to the interview questions.

After obtaining ethics approval, we conducted two pilot studies, one with an assurance provider interviewee and one with a reporting preparer interviewee. The two pilot studies helped us become familiar with the interview procedure and test the feasibility of the interview instrument, as it is essential for an interview study (Creswell & Creswell, 2018). The pilot studies also provided opportunities to ensure that interviewees fully understood the interview questions and other relevant information, such as their rights and the confidentiality of their responses.

Then, the interviewees were approached by email and instant messaging apps. Each interviewee received a confirmation package prior to the interview, which included a consent form and an information sheet outlining the study’s nature and objectives, as well as the interview questions. The interviewees were assured anonymity and confidentiality. It allows them to discuss openly and freely share their stories or express their expectations regarding sustainability assurance and other sustainability activities. Permissions for recording were obtained prior to the commencement of the interviews. All the interviews were audio recorded and transcribed instantly via the iFLY App. Manual notes were also taken during the interviews. The length of each interview was approximately 40 to 90 minutes. The same researcher conducted all interviews, ensuring a consistent approach and comprehensive coverage of all questions (Brennan, 2022).

We also consider data saturation issues cautiously to improve generalisability and reliability during the data collection. The sample in qualitative research aims to identify meanings in nature rather than frequency in numbers (Brennan, 2022; Saunders et al., 2018). We adopt the saturation process model developed by Alam (2021) to determine the achievement of theoretical saturation. Specifically, as more interviews were completed, the codebook was refined to ensure that all or part of the transcripts from previous interviews were recorded properly. When an emerging theme was identified, a backup interviewee was contacted for further interviews. Then, the emerging theme was added to the interview questions correspondingly. The evolving process continued until no additional themes were identified, indicating that saturation had been achieved. Then, the interview stopped.

Forty interviewees finally attended the interviews either in person or online in 2023. The sources of the interviewees were completed in two phases: the initial and the subsequent phases. In the initial phase, 35 interviewees participated in interviews conducted in June and July 2023. After the initial phase, the theoretical saturation is considered; in other words, additional interviewees were needed as new themes emerged in the initial phase (Saunders et al., 2018). As a result, five interviewees were approached in the subsequent phase, from November to December 2023, until no new themes emerged. Overall, 29 report preparers and 11 assurance providers were interviewed.

The demographic profiles of the interviewees are shown in Table 1. The only reason for choosing the online interview was that the interviewer could not reach the interviewees’ cities. According to Brennan (2022), there is no significant difference in the quality of collected data between in-person and online interviews.

As shown in Table 1, 29 report preparers accepted the interview invitations. Of the 29 interviewees, nine (32%) had practical experience in sustainability reporting and assurance and 28 (97%) had practical experience in sustainability reporting. One CEO interviewee (3%) had yet to be involved in practical sustainability reporting and assurance activities, but was knowledgeable about sustainability compliance requirements due to their past working sectors. Eleven assurance providers attended the interviews. Out of the 11 interviewees, four (36%) had practical experience in sustainability assurance. Although the other seven interviewees (64%) did not have practical experience, they were knowledgeable in the sustainability assurance market, having previously participated in national sustainability research projects or worked as partners or principals, attempting to expand their services into non-financial fields.

The GTM guides the data analysis process in our study. GTM is a common data analysis method in qualitative research. The theory requires researchers to analyse qualitative data using a categorisation process that emerges inductively from the collected data, rather than from existing concepts or predetermined hypotheses (Glaser & Strauss, 2017). The data analysis follows the three stages of GTM: open coding, axial coding and selective coding (Williams & Moser, 2019). The application of GTM also aligns well with interview questions developed based on the framing tasks identified in our study. Interviewees identify issues or problems in the broader sustainability reporting and assurance context at the diagnostic level. The codes are constructed based on the underlying principles/philosophies/culture/rituals required to make sense of sustainability assurance and to assess its quality. Moreover, the varied perceptions of the interviewees were identified to highlight differences, such as those between before and after compliance requirements, with and without qualifications, and assured and not assured, etc. Furthermore, when the interviewees shared their stories about sustainability activities, metaphors, symbols, sentiments and manners were relied upon to help identify the interests and motivations necessary to achieve high-quality assurance.

NVivo facilitates initial data cleaning and an open coding process. The advantage of NVivo is its ability to code, sort, query and retrieve data through its searching function (Alam, 2021). Moreover, the analytical memo can be done with the software. In the open coding process, cleaned transcripts are analysed by NVivo. The quotations are broken into small pieces and initial codes are assigned to emerging themes, such as assurance providers’ qualifications, the value of sustainability assurance, reasons to adopt or refuse, etc. Subsequently, the open codes were transferred to an Excel spreadsheet for axial and selective coding. In the axial coding process, the initial codes are categorised into broader tribes, which align with the interconnected activities in the diagnostic framing tasks. The tribes are refined and analysed for relationships among them. In the selective coding process, the final theme is determined and assigned to sense-marking, naming and storytelling tasks to build up the different frames of our interviewees. Transcripts from semi-structured interviews were analysed several times. The interviewees’ comments were grouped under concepts emerging from the interviews, and a codebook was prepared.

To further enhance validity and reliability, issues related to intercoder reliability (ICR) and translation risks are addressed through the data analysis process. Following Campbell, Quincy, Osserman, and Pedersen (2013), the concepts/principles/examples/quotations extracted from the transcripts to form axial codes were peer-reviewed. To minimise the bias from a single interviewer engaging in both the interview and coding process, the co-authors reviewed the transcripts and codes to enhance the reliability of the research outcomes. Preliminary results were also presented at an internal colloquium, webinars hosted by an accounting profession association and academic conferences for further suggestions. Moreover, the raw transcripts are in Chinese and Word format. Subsequently, they are translated into English and refined for analysis. As Brennan (2022) emphasises, the “lost-in-translation” risk arises from translating interview quotations from another language into English. Following the recommendations of Feldermann and Hiebl (2020), we translated the raw transcripts using Google Translate and Tencent Translate and compared the resulting differences. Two researchers in our project are native Chinese speakers that are also proficient in English. The translation was modified to ensure that all necessary information was adequately included, thereby maintaining reliability and professionalism in accounting. Furthermore, a translation agency approved the final translations. Overall, the risks and subjectivity involved in the data collection and analysis process were well-managed, based on a framework developed in accordance with framing theory.

The interpretation of our results is based on the theoretical framework of our study. It is developed based on the process of framing theory (i.e. diagnostic level) (Maroun, 2019) and three tasks in the process (i.e. sense-making, naming and storytelling) (Durocher & Georgiou, 2022; van Hulst & Yanow, 2016). Although the three tasks are interconnected, we report the results based on each task because we have different focuses in each process. Based on dynamic frames, similarities and distinctions between the two groups of interviewees emerge and are reported and discussed in this section.

Our results show that, regardless of the backgrounds of the types of assurance providers, all the assurance providers interviewed demonstrated a care for the quality of sustainability assurance. The assurance providers make sense of sustainability assurance quality from three aspects: (1) increasing coercive pressure, (2) demands on companies’ sustainability activities and (3) a core competitive strategy. In the Chinese context, coercive pressure comes from the central government and authorities. Coercive pressure, such as compliance requirements, encourages market participants to adopt sustainability assurance at an appropriate level. From the assurance providers’ point of view, the increasing institutional pressure on sustainability activities worldwide is identified as a key indicator of achieving high-quality sustainability assurance. Moreover, industrial leaders, such as G250 companies and the Big 4 or Top 8 accountancy firms, perceive the quality of sustainability assurance as a symbol of their leadership positions. The results align with several existing studies focused on the Chinese market, e.g. Shen et al. (2023) highlight that the leading companies and Chinese SOEs are more likely to assure their sustainability reports to brand their market positions. Further, the intrinsic motivation to achieve higher quality assurance is to improve the service provided.

The increasing demands on companies’ sustainability activities heighten expectations for the quality of disclosed sustainability information. For example, AP38 comments, “When we discuss the quality of sustainability assurance, the key issue is who needs the assurance, rather than comparisons among different types of assurance providers”. The result aligns with extant literature (Christensen et al., 2021); the stakeholders’ increasing expectations of the quality of disclosed sustainability data are one of the main drivers of sustainability assurance. Assurance providers are motivated to achieve high-quality results and dominate this unregulated market. For example, AP31 comments, “It [sustainability assurance market] is a blue ocean market (AP31)”, where the demand for high-quality sustainability assurance needs to be created for client companies, and the market rules are waiting to be set. Assurance providers are also prepared to enhance their service quality in response to potential changes in regulatory pressures and client requirements. As a result, the quality of sustainability assurance is a core competitive strategy in the market.

In contrast, the results from the reporting preparers show that almost all of them did not pay much attention to the quality of sustainability assurance. For example, only one SOE interviewee (out of 21 SOE interviewees in total) is concerned about the quality of sustainability assurance. More importantly, one-third of the total 21 SOE interviewees clearly stated “No” to obtaining assurance on their sustainability reports at a higher level. Chinese SOEs are major participants in the sustainability assurance market and are proficient in sustainability activities because they are formed for overall welfare instead of optimising profitability (Shen et al., 2023; Li et al., 2023). The Chinese SOEs also attempt to perform their obligation to the public welfare to maintain their legitimacy (Li et al., 2023; Shen, Wu, & Chand, 2017; Weber, 2017). They are keen to maintain the traditional operation mechanisms without changing the current management mode, such as by adopting sustainability assurance in SOEs. Furthermore, all our interviewees mentioned that they would not engage in sustainability assurance until it became compulsory. Thus, the quality of sustainability assurance is only considered to meet the expectations of the government and its authorities. This finding aligns with Shen, Ng, Zhang, and Wang (2020) and Xu and Yang (2010), suggesting that central government strategies have a significant influence on the uniqueness of sustainability development activities in China.

The results from non-SOE companies are similar. For example, 8 out of 29 interviewees (28%) mentioned not being concerned about the quality of sustainability assurance. One interviewee said, “Well, I don’t care; if it [sustainability assurance quality] satisfies the compliance requirements, that is fine (RP4)”. Moreover, one independent director interviewee mentioned, “I have done research on sustainability reporting and assurance, the findings are irrelevant to firms’ value and shareholders’ profit, so I…well…I don’t care [about the quality], and I don’t pay attention to it; it is useless (RP16)”. Our results also reveal that only one interviewee with a multinational working background positively perceived that “the quality of sustainability assurance is essential, a high quality is really good for companies, at least the company can review their performance based on the assuror’s opinions (RP22)”. The remaining 18 interviewees kept a neutral sentiment on sustainability assurance, e.g. “It [sustainability activities] is a very popular topic in China, but we may not engage in it only if there is a compulsory requirement (RP5)”.

In addition to the sentiments captured above, one interviewee from the leading Chinese company in G250 gave a new insight into sustainability assurance practice. The interviewee claimed that “from our company’s point of view, as the leader in the world, we have made so many efforts to do good to society. We don’t expect any immediate return on the investment in sustainability, although the company will undoubtedly benefit from it in the long run. To this extent, do we really have to report and even assure it? This is just what we should do as a public company (RP1)”. This insight aligns with Li et al. (2023), suggesting a navigational space for sustainability reporting and assurance activities in China. As a result, the reporting companies can adopt an appropriate mechanism and establish a framework that best fits the unique Chinese institutions.

Several reasons can explain the reporting companies’ different attention to the quality of sustainability assurance. Firstly, the current economic recession in China has left businesses with few resources to invest in sustainability activities. All our interviewees reflected that it is not an appropriate time to engage in sustainability assurance in China due to the economic depression after COVID-19. For example, one interviewee said, “If the concept [sustainability assurance] was introduced five years ago when the economy was booming, I think all of us will accept it; for sure, we would like to do good for society (RP23)”. Others stated: “The current and the only goal for a company today is to survive” and “… to earn money, to pay for employees and daily operations, we really don’t have extra money to invest in sustainability now (RP8 and RP11)”. Moreover, an SOE interviewee highlighted, “The problem ESG assurance faces in China is the question of yes or no, rather than high or low quality (RP16)”. Additionally, the sustainability assurance market is underdeveloped in the current economic depression era; “the quality can only be compared in a competitive market with great demands and supplies. However, the current assurance market is more like a niche market in China; the supplies and demands are quite limited (RP14)”.

Second, the cost of sustainability assurance is considerably too high to afford. From the reporting companies’ perspective, the sustainability assurance engagement cost encompasses both direct and indirect expenses. The direct cost is mainly the service fee charged by assurance providers. Based on our interview results, fourteen interviewees who are price-sensitive clients mentioned that they “choose a cheaper service rather than a higher quality but expensive one (RP21)” to “reduce cost (RP5)”. Moreover, SOE interviewees are neutral about the service fee because “we can only engage with providers on the SASAC list; the fees are transparent”. Only two out of 29 interviewees mentioned that the quality of sustainability assurance is essential because “we are the leading company in the industry, so we are happy to engage with reputable and leading providers, like Big 4, our status should be the same (RP6). On the other hand, the indirect costs restrict the reporting companies’ willingness to engage in high-quality sustainability assurance. Sustainability assurance engagement is not an isolated business operational behaviour; the engagement only exists when a sustainability report is disclosed. As such, the indirect cost of sustainability assurance primarily consists of the opportunity cost associated with preparing sustainability statements. Sustainability activities remain challenging for companies that face mandatory reporting requirements and those operating in industries with sustainability-sensitive operations. For example, the interviewee said“. Some companies have to prepare CSR, ESG, internal control report and climate change report; they spend half a year to do reports and spend another couple of months for audit to meet different compliance requirements, so how and when can they generate income? (RP25)” Considering the high indirect cost, the reporting companies are less likely to engage in sustainability assurance, particularly in high-quality.

Third, the short-term incentives for investment in high-quality sustainability assurance are invisible. Sustainability is a social goal for humans to co-exist globally for a long time. However, once sustainability activities are considered a common business practice, the companies must balance the costs and benefits at arm’s length. For example, “we only need it [sustainability assurance statement] for grant applications (RP21, RP14 and RP16)”, and “to be honest, we won’t engage in sustainability assurance until it is compulsory (RP19). It is useless, just a waste of money and time (RP8)”. Moreover, one interviewee from a G250 Chinese company with a systematic and established sustainable corporate culture stated, “Sustainability activities cannot generate any benefit in the short term, but the investment and preparation are huge. The company will benefit from doing good for society in the long term, for example, our consumers’ trust, good reputation in our sectors, and more opportunities to be involved in large national projects (RP1)”.

Furthermore, the diversification of sustainability disclosures raises concerns about the comparability of sustainability assurance quality. For example, “[If] the disclosure includes qualitative data, the assuror is more likely to assure these data based on experience and personal judgement, as there are no legal assurance standards in China, the whole assurance process is subjective (RP22 and RP15)”. Moreover, all interviewees reveal that they cannot distinguish the quality of assurance done by different assurance providers, e.g. “based on my knowledge, accounting firms are a little bit more expensive than other firms; anyway Big 4 are the most expensive because of the brand and marketing. But to be honest, I don’t know how they are different from others (RP24 and RP14)”, and “I am not sure whether they use templates to create assurance statements, regardless of the firms or the industrial experts, the statements are in the same format, structure, contents, and even words, they are exactly the same (RP21, RP5 and RP15)”. Therefore, “the benchmark to evaluate the quality is absent (RP16)”. Additionally, the customised sustainability frameworks, such as the ESG framework challenge the comparability among diversified sectors, “for example, how can I compare the assurance quality for a manufacturing company and a financial institution? The disclosed information is 100% different between the two companies, so how do I conclude whose assurance is better or worse? (RP16)”.

In summary, 13 interviewees (11 assurance providers and two reporting preparers) cared about the quality of sustainability assurance. At the same time, the remaining 27 report preparers are against it or hold a neutral position. The summary of the two groups’ (assurance providers and reporting preparers) sense-making of sustainability assurance quality is presented in Table 2.

Naming is the process of identifying differences between normal and abnormal, old and new, easy and difficult or any other relevant distinctions pertinent to the issue at stake (Durocher & Georgiou, 2022). In the naming task, we aim to understand how the interviewees perceived sustainability assurance and its quality. Our results show that all the assurance providers assert that sustainability assurance differs from a “financial audit” because the providers, compliance settings, entry requirements and clients are varied. As stated by all interviewees, sustainability assurance is a dynamic service to “verify CSR/ESG/climate change/non-financial reports”. It can be done by different providers, as evidenced by statements like, “There are lots of small firms providing this service in China now, not only Big 4” (AP30).

We also identify some differences at the diagnostic level between accountancy providers and consultancy providers due to the varied naming process of sustainability assurance. Sustainability assurance, a non-financial service, is often referred to as an “additional service” in traditional accounting firms, according to interviewees from accountancy firms. The backgrounds of all accountancy providers’ interviewees are in accounting and auditing firms; therefore, they attempt to apply traditional knowledge and experience from financial auditing to non-financial areas during the framing process. They are more likely to understand non-financial services from a financial perspective, although the interviewees agree that financial and non-financial assurance services are entirely different. As a result, in the naming task, accountancy providers would like to distinguish between sustainability assurance and financial audit in terms of compliance purpose, coercive pressure and assurance failure risks.

On the other hand, the consultancy providers name sustainability assurance as a “tailored service” to their clients. The consultancy providers name sustainability assurance from a technical angle and emphasise the importance of professionalism in sustainability assurance, for example, the assurors’ comprehensive reading skills and their ability to examine the disclosures of innovations/sustainable strategies/and new energy materials. As documented in Table 1, the interviewees from consultancy providers have backgrounds in clinical science and mining engineering and they lack experience in accounting and auditing. Thus, the financial audit concept is absent in their naming process. To this extent, the consultancy providers are more likely to engage in a tailored assurance service to the clients, which is also in line with Shen et al. (2017) and Ruiz-Barbadillo and Martínez-Ferrero (2022), who claim that the consultancy providers are more popular in the market because of their industrial knowledge and experience rather than their financial backgrounds.

Naming is also at play when assurance providers (i.e. accountancy providers and consultancy providers) select the standards to ensure the quality of sustainability assurance. AP32 stated that “It [The sustainability assurance] is just voluntary, but probably it is going to be mandatory, as there are several mandatory reporting requirements across the world right now (AP32)”. The assurance providers can voluntarily choose to use or not use assurance standards. Accountancy providers widely adopt ISAE 3000, while consultancy providers prefer AA 1000. As AP31 illustrated, “We will comply with ISAE3000 to check the KPIs; for example, if the scope of the assurance is carbon emission, then we will verify data based on ISAE3000 requirements”. On the other side, AP39 emphasised AA1000 in expressing opinions, “Our opinions are expressed based on two levels, the primary level is the stakeholder engagements required by AA1000, and the secondary level is the scope of assurance. If there is any investigation report and related responses, we will also consider them”. In contrast, the results from the sustainability reporting preparers were mixed among SOE and non-SOE interviewees. As Li et al. (2023) suggest, we still have limited knowledge of sustainability assurance and a limited understanding of it in the context of emerging business practices in China. Our results show ambiguous perceptions of sustainability assurance from the SOE interviewees. For example, four SOE interviewees were unable to differentiate between the fundamental sustainability frameworks, such as environment, social, and governance. e.g. “It is only for climate change and environmental issues, isn’t it?” (RP5). Moreover, two interviewees, RP4 and RP24, continued to introduce the preparation procedures for sustainability reports and their perceptions of the reporting quality, rather than the sustainability assurance quality. Our results contrast with a few extant studies reporting that Chinese SOEs are proficient in sustainability reporting and assurance activities (Li & Belal, 2018; Shen et al., 2017).

However, the results from the private companies show that the interviewees are more understanding of sustainability assurance, owing to their individual experiences and the company’s involvement. A supportive example from this perspective is a Director of OSH interviewee, RP22. The interviewee previously worked in an established company in the EU and had experience working with multinational companies. The extensive exposure to sustainability reporting and assurance activities gained through work experience enhances personal professionalism in this area. As RP22 said, “I was recruited to join this company because of my sustainable background; I am competent to facilitate the company to prepare compliance documents for IPO (initial public offering)”. Moreover, a private company interviewee mentioned that “our overseas customers requested the sustainability assurance statement” (RP21). Consequently, the company has been intensively involved in sustainability reporting and assurance activities.

From the perspective of sustainability reporting preparers, the emerging influence of new media supports an understanding of the concept of sustainability assurance. An interviewee from a private company addresses the communication role of new media. The company has not been involved in sustainability assurance; however, the interviewee is knowledgeable about sustainability reporting and assurance topics, including the reporting framework, assurance standards, and types of assurance providers. The interviewee (RP20) learned about sustainability reporting and assurance topics from social media. The interviewee said, “I just randomly browsed TikTok, and I saw an advertisement for an assurance provider. There are many video clips for ESG training, for example, on how to get certificates and some of the latest updates. I feel that ESG should be the future trend, so I subscribed to a few ESG channels” (RP20).

We obtained rich information from the storytelling task. Our results show that, in general, the assurance providers reflected a positive and thoughtful approach to sustainability assurance quality, which is supported by the longer interview durations compared to those of the reporting preparers and evidence of their storylines. The interviewees in the two groups gave their own storylines based on their sense-making and naming of sustainability assurance quality. The results are presented separately by two groups as follows. A summary of naming and storytelling is presented in Section 4.4.

The assurance providers’ storylines for justification of their views about sustainability assurance quality are based on the following five aspects: (1) quality of disclosed sustainability data, (2) competence of assurance providers, (3) professionalism of assurance providers, (4) communication between assurance providers and client companies and (5) cost-benefit and long-term consequences. The following are the details of the results.

The first emerging storyline is the quality of disclosed sustainability data. AP32 indicates that “honestly, we [the assurors] cannot assure all the disclosed data in terms of the workload limit, but if they [the reporting company] follow the standards, report the reliable information, then for sure we can implement a higher level of assurance based on their reporting”. Our results also show that consultancy firms rely on interviews with their clients and only test key data based on the scope of assurance provided. For example, AP39 highlighted that the data source is dominantly from the client, and the verification is limited. Consequently, the coordination with client companies threatens the quality of sustainability assurance provided by consultancy firms, as AP39 complains, “Sometimes the interviewee in a client company cannot attend the appointment on time and says they don’t have time to catch up, so how can we verify their data if we don’t meet with each other? [As a result] we have to modify some statements or reports from other companies in the same industry and make up one for the client”.

The second storyline focuses on the competence of assurance providers, who believe it is essential to deliver high-quality assurance. AP32, AP35 and AP37 stated, “a professional accounting or auditing qualification, such as CPA, is not essential for sustainability assurance providers, but the sustainability assurance provider must be able to verify disclosed data and inform report users”. Our results also show that assurance techniques are diversified in accounting and consultancy firms. Traditional audit techniques influence the assurance providers from accounting firms. They attempt to apply traditional knowledge and experience from financial auditing to non-financial areas during the framing process. They are more likely to understand non-financial services from a financial perspective. For example, AP30 and AP31, who work for the Big 4, describe assurance processes that are rooted in the nature of an accounting firm; they highlight the importance of “number and figure”, “concrete indicators”, “the data source” and “the evidence of KPI for a current period”. In addition, AP37 also highlights that “compared with other firms, Big 4 take advantage of their review capability” because audits are an ordinary part of their business. On the other hand, the consultancy providers’ framing process of sustainability assurance is customising a service to their clients. Therefore, the problems diagnosed by consultancy providers are more technically based and emphasise the importance of professionalism in sustainability assurance, for example, the assurors’ comprehensive reading skills and their ability to examine the disclosures of innovations, sustainable strategies, and new energy materials.

The third storyline is that the interviewees question the professionalism of assurance providers in ensuring assurance quality due to the lack of universal reporting and assurance standards, as well as qualification requirements. For example, AP36 is frustrated with “the lack of a universal standard, … so that we have nothing to rely on during the verification process”. AP39 indicates that the consultancy firm is permitted to enter the sustainability assurance market because it is an “AA1000 permitted firm”. AP31 emphasised the importance of assurance standards and matching reporting standards: “If the level of required disclosure in reporting standard does not match with assurance standard, then the company’s power on the reliability and credibility of disclosures are enlarged, they can explain to the public however they want”. AP36 said, “The information disclosed in sustainability reports and the reporting standard they comply with are totally different from what we comply with and our financial backgrounds”. In terms of qualification requirements in providing assurance, our interview results reveal that regardless of the types of assurance providers, the expertise from other industry professions is essential to maintain the quality of sustainability assurance, “although the professional accounting or auditing background is helpful” (AP37); “that is not enough if you are merely a qualified CPA in sustainability assurance market, you need to consult with professions on environment or climate change issues, or other experts” (AP32, AP34, AP37 and AP38). Consequently, “the assurance providers will be very diversified and dynamic; most of them are unlikely to be CPA in traditional accounting firms”, as AP38 suggested. To this extent, the dynamic backgrounds of consultancy providers are greater than those of accounting firms. The best illustration is the backgrounds of AP39 and AP40 from consultancy firms, whose backgrounds are clinical science and mining engineering.

The fourth storyline is about communication between assurance providers and client companies. The interviewees believe that sufficient and effective communication improves the quality of sustainability assurance. AP35 described the sustainability assurance process and highlighted that effective communication between assurors and clients would improve assurors’ understanding of the client’s requirements. AP39 identified two drawbacks in the quality of sustainability assurance, stating that there is a “lack of assurance scopes and mess up the purpose of sustainability assurance; we can overcome those drawbacks in the catchups before engagement”. Effective communication before the assurance engagement also enhances client companies’ understanding of sustainability assurance; as AP31 mentioned, “most of the clients do not have any idea of sustainability assurance; in clients’ minds, they only pay for a statement”.

The fifth storyline focuses on the cost-benefit analysis and long-term consequences. Our interviewees perceived that the short-term economic benefits of investing in sustainability assurance are limited to the reporting companies. As AP31 mentioned, “Most of our clients don’t choose a higher level of assurance because they couldn’t see any economic return from the engagement; the only motivation is to satisfy particular requirements, for example, the business partner needs the statement, or the government needs”. To this extent, “the client needs to balance the cost and benefit from this engagement, … the workload for a high-quality assurance is extremely high, most of the clients, therefore, choose to lower the cost and compensate the quality” (AP30). AP31 further explained that assurance fees charged “cannot afford a very high level of assurance due to the qualitative nature of sustainability information, a mass of in-depth work should be conducted if we really want to verify one data, but obviously, the client doesn’t want to pay for it”. In the long term, the interviewees perceived that sustainability assurance is relevant to a company’s healthy growth and long-term benefits. AP32 stated that “high-quality assurance provides supportive evidence of ongoing concerns in the scope of financial accounting assumption”. Additionally, AP38 explained the long-term implications of public companies and SOEs: “These companies cannot consider economic profit only; the companies must consider their social responsibilities to the public because they belong to the whole community”. Moreover, AP33 highlighted that the “compensation of sustainability assurance quality may not have a negative effect on an individual entity in the short term”. In the long term, “if none of our companies or assurors care about assurance quality, then from a higher level or even country level, this will make troubles on sustainability development, unless we stop assuring it” (AP34).

In contrast, the storylines from the sustainability reporting preparers emphasise (1) the company’s integrity to ensure reliable and credible sustainability disclosures, (2) the experience and expertise of assurance providers and (3) the representation of assurance statements. The details of these storylines are reported as follows:

The first storyline focuses on sustainability assurance quality, built upon the company’s integrity. One interviewee, an independent director of multiple companies, explained, “From the aspect of large companies or healthy companies, such as SOE or some leading companies, they already behave as industrial models in the market; regardless of external assurance, they do good to society; obviously, the quality of assuring their disclosures will be good. In contrast, from the aspect of poor companies with destroyed reputations or credibility, their reported data might not be reliable and credible; as a result, how can I expect an external party to perform high-quality work on fake data?” (RP18).

The second storyline focuses on qualified assurance providers and their expertise in delivering high-quality sustainability assurance. All interviewees reflected that they understand that sustainability assurance is unlike financial audits, and individual assurors have no compulsory qualification requirements. However, SOE interviewees prefer that assurance providers to have qualifications. They mentioned that “we will choose assurance providers on the SASAC list, which means those providers are accredited by the authority and fully qualified” (RP13, RP15 and RP26). In contracts, the storylines of non-SOE interviewees focus on the assurors’ experience and expertise in sustainability assurance. One interviewee suggested, “We don’t care about the auditor’s qualification, a CPA or other certificate does not matter, but we need someone who knows our industry” (RP24). Another interviewee from a non-listed SOE also emphasised the experience of the assurance provider in addition to the accreditations, “in terms of our industrial speciality; we will choose listed providers who have experience in assuring CSR reports for other companies in the industry” (RP24). Other interviewees agreed that “big accounting firms, like Big 4” (RP12) or consultancy firms, e.g. “have an AA1000 license” (RP20), can provide high-quality service because of their reputation and accreditation. To this extent, the qualification or license from an accounting professional body or industrially recognised membership is perceived as a guarantee of high-quality service in the market.

The third storyline concerns the representation of assurance statements. Our interviewees believe that the outcome of a high-quality sustainability assurance must include assurance statements that align with the assuror’s opinion. Our interviewees mentioned that the assurance statement must include “an understandable assurance provider’s opinion” (RP28) and be presented in “a clear written format” (RP10). Another interviewee suggested that “this should be a formal written statement, like a financial auditor’s opinion, the assurance provider should address the scopes, objectives, methodologies and limitations in the statement … and the reporting standards we follow, as well as the qualification of the assurance provider” (RP17). The results suggest that diversified assurance reporting with different formats of the assuror’s opinion currently exists in China’s sustainability assurance practices. However, none of the interviewees emphasised the independence of assurance providers because “it is not necessary, this is not a regulatory service like auditing, this is just kind of like we are seeking a certificate or valuation or approval from an external party if they are professionals in our industry, that is it” (RP19, RP24 and RP13).

A summary of the above results (naming and storytelling) is shown in Table 3. As Casey and Grenier (2015) suggested, the comments on the quality of sustainability assurance from different stakeholders are informed by their own perspectives. Results from the naming task indicate that assurance providers highlight the completion level of the service provided, following predetermined targets and prescribed procedures, and reporting preparers prioritise meeting the stakeholders’ requirements, including those of the client company.

The storylines from both groups emphasise that the quality of sustainability reports enhances the quality of sustainability assurance. The qualifications of assurance providers are highlighted by reporting preparers, while assurance providers believe that their competence and professionalism are important factors in determining the quality of sustainability assurance. From their perspective, assurance providers emphasise that effective communication with client companies is associated with higher-quality and more sustainable reporting, as preparers believe in representing assurance statements.

Another emerging insight is the independence of assurance providers. The interviewees perceive that independence does not make sense in the current sustainability assurance situation because it is not a mandatory requirement regulated by law. Instead, sustainability assurance is an emerging service provided by multiple firms. The emerging perception of independence challenges many existing studies that highlight the significance of assurance providers’ independence in the sustainability assurance market (Channuntapipat et al., 2019). Much existing literature highlights the importance of the independence of assurance providers on the quality of sustainability assurance. For example, Zorio et al. (2013) found that the independence of assurance providers significantly influences the credibility of sustainability assurance, based on a sample of 161 Spanish individuals. To this extent, the appearance of independence can be reached based on rotations and tenures, as suggested by Ruiz-Barbadillo and Martinez-Ferrero (2023). However, assurance of providers’ independence in substance is difficult to achieve without a regulatory landscape, according to the interview results.

Our study aims to explore how sustainability report preparers and assurance providers frame the quality of sustainability assurance. Sustainability reporting preparers and assurance providers perceive the quality of sustainability assurance from their own perspective. They offer some insights into why they care or do not care about it, how they understand the quality of sustainability assurance, and the storylines behind their perceptions. Through alignment with the framing process, sense-making, naming and storytelling, we identify two distinct frames between the two parties. The sustainability reporting preparers maintain a “compliance requirement” frame. They perceive sustainability assurance as a strategy to satisfy the increasing demand for disclosures and mandatory requirements. Guided by the “compliance requirement” frame, the sustainability reporting preparers will not achieve higher quality with additional investment in sustainability assurance unless compliance requirements dictate otherwise. On the other side, the sustainability assurance provider maintains a “professional service” frame; they perceive sustainability assurance as a value-added practice to their company clients. Guided by the “Professional Service” frame, the assurance provider aims to enhance the professionalism and competence of assurors to meet the growing demand of clients for higher-quality sustainability assurance.

The framing process of sustainability assurance quality is dissimilar between the two parties; as such, the report preparers and assurance providers do not speak the same language. The respective perceptions of the two groups seem irreconcilable, leading to intractability. During the framing process, the two groups determine what constitutes facts and what arguments are deemed relevant, based on the two conflicting frames. It appears that there is no reflection on established frames and hence, no re-framing or frame shifting between the two parties. Instead, the established frames are reinforced because the information is shared within the same group, making it more challenging for shifting frames to occur outside the group. This implies that there is little hope for report preparers and assurance providers to align their perceptions of sustainability assurance in the current situation. Our study highlights the audit expectation gap (Hassink et al., 2009) and legitimacy gap (Emma et al., 2024) between assurance providers and sustainability reporters. This suggests that considerable work remains to be done in the dialogue between the reporting company and its assurance provider. It also highlights that communication between assurance providers and sustainability reporters on the matter of sustainability assurance is an important starting point for achieving its quality. Due to divergent views on assurance quality, regulatory bodies may need to develop new policies and guidance to help reduce the gap and consequently improve assurance quality. Furthermore, only high-quality assurance provides valuable information for informed investment decisions. Such divergent views are also crucial for investors because the quality of assurance may not be guaranteed without a common understanding of ESG assurance practices and their quality among assurance providers and sustainability reporters. This is particularly important for non-SOE investors because they have fewer business resources than those SOE investors. Moreover, it is also important to other stakeholders who care about the environment and the social practices of the companies. We summarise the main implications for key stakeholders in the ESG practice, including reporting companies, assurance providers and governing bodies, as follows.

From the reporting companies’ perspective, management may consider other navigational spaces to integrate sustainable activities and assurance into overall management strategies. The reporting company may need to foster an inclusive and sustainable corporate culture to enhance awareness of sustainability assurance. Moreover, both group interviewees in our study emphasise the quality of sustainability reporting data to ensure high-quality assurance. It encourages management in the reporting companies to adopt appropriate strategies and mechanisms to achieve that objective. Interviewees from assurance providers emphasise that effective communication with client companies is crucial for achieving high-quality assurance. Thus, the reporting companies could better cooperate with their assurance providers to ensure high-quality assurance of their sustainability reports. Furthermore, at the management level, the selection procedures for assurance providers should be carefully considered, particularly in terms of integrity, professionalism and the scope of verification.

From the assurance providers’ perspective, our study’s results can help them better understand the chaotic sustainability assurance market and their potential clients’ perceptions. The qualifications of assurance providers are highlighted by reporting preparers in our study. Assurance providers may consider multidisciplinary experts to establish sustainability assurance teams accordingly. Sustainability reporting preparers also question the assurance statements in the assurance report. Assurance providers must consider forming a team with diverse knowledge from other industries and disciplines to enhance the assurance report, particularly in terms of the completeness, content and methods used.

Our study also has some implications for policymakers and regulators. Policymakers and regulators may consider the regulatory influence of domestic companies and their corporate governance structures, especially during various phases of economic development. In the current development phases, the reporting companies are reluctant to engage in sustainability activities due to the limited resources and invisible incentives. Our findings inform policymakers to consider several impacts on promoting the development of sustainability activities. At the government level, regulators may offer incentives (such as tax benefits, priority access to limited resources, rewards or certificates to encourage social recognition) to reporting companies to promote their commitment to sustainable activities. Additionally, the standardisation mechanisms and ethical conduct should be enhanced in the policy-making process.

Our study has several limitations. First, our study is qualitative in nature and based on semi-structured interviews. The inherent limitation associated with qualitative research in our study is that it is not possible to extrapolate or derive the findings. Also, the interviewees’ understanding of sustainability assurance at the higher level does not necessarily align with their actual behaviour. Second, our study only included two main stakeholders: assurance providers and report preparers. The perceptions of other stakeholders regarding sustainability assurance have yet to be investigated. Moreover, the interviewees’ views may be impacted by social desirability bias and a tendency to give “correct” answers to protect the reputations of their firms and themselves. Furthermore, although the theoretical saturation is managed in our study, the sample size is relatively small. The results cannot represent the entire population of companies and assurance providers involved in sustainability assurance. Our study provides several future research directions. The most meaningful and valuable research direction identified in our study is the independence of assurance providers. Both groups’ interviewees highlighted the professionalism of assurance providers, but independence, as a key component of professionalism, was not a concern to them. Future research could investigate this matter further using different data sets. Second, future research can gain additional insight from stakeholders less directly involved in the sustainability assurance process, such as standard-setters and investors.

The supplementary material for this article can be found online.