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THE Florentin Emil Tănasă, Marian Siminică, Florian Marcel Nuță: The Role of Sustainability
Reporting for Enhancing the Corporate Credibility. A Literature Review

1. INTRODUCTION
The business and investment context is complex and take into consideration more than
the financial disclosure and what a company report to its stakeholders. Polishing ones
image in a creative manner to show its commitment to environmental or social
objectives is a past story. However, a major trust gap exists in the market for non-
financial (ESG) information. This distrust coming from “greenwashing” practices is
a serious matter, the common perception that many companies are building a “green”
facade that does not accurately reflect the reality of their operations being a
malvaceous issue that hinder the stability of the business and investment context.

Recent statistics and studies report on this matter, such as an institutional survey (EY,
2024a) reveals that up to 85% of investors believe that misleading statements about
sustainability performance are more common now than five years ago. In parallel,
55% of financial leaders admit that reporting in their own sector risks being labeled
as greenwashing (EY, 2024b). Furthermore, a 2024 global barometer (EY, 2024c)
found an average score of just 54% for the quality of sustainability disclosure. Perhaps
even more directly, 88% of investors complain that, in the absence of a law, most
companies simply do not provide ESG information that is useful enough to make
decisions (EY, 2024d). in addition, apparently most of the consumers fall for
greenwashing practices being unable to detect the differences between real green and
greenwashed (Fella & Bausa, 2024). The response to this erosion of trust has come
from regulators, and the change is fundamental. In the European Union, the Corporate
Sustainability Reporting Directive (CSRD) represents a real turning point. The CSRD
does not simply require detailed reporting according to the European Sustainability
Reporting Standards (ESRS).

At the same time, on the global stage, the International Sustainability Assurance
Standard (ISSA) 5000 is emerging. It is intended to become a reference base for high-
quality and consistent auditing, to be applied to both voluntary and mandatory
commitments. The shift from voluntary to mandatory sustainability auditing is not a
simple bureaucratic adjustment; it is a structural change. It forces us to ask how
effective this new mechanism actually is. Therefore, the present research aims to find
an answer to the following question:

What is the current state of the literature on the ability of sustainability auditing to
enhance the credibility of reporting, in light of the new requirements (CSRD) and
standardization (ISSA 5000)?

The rest of the study includes the literature review in section two and the research
method in section three. Section four is dedicated to discussing the main results and
section five to present the concluding remarks, implications, and limitations.

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