Page 9 - Azerbaijan State University of Economics

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

4. RESULTS AND DISCUSSION
Thematic analysis of the 47 selected papers reveals an intense academic interest in the
field of sustainability auditing. However, this interest is marked by visible lack of
consensus that needs further clarification, especially in the context in which
mandatory regulations (such as CSRD). The spread of topics and the research trends
will be more accurately visible during the second part of this study, when Vos Viewer
mapping was employed.
The first part of the analysis highlights four central themes as follows:
• auditing as a direct response to the credibility crisis and greenwashing;
• the fundamental debate on the level of disclosure (limited vs. reasonable assurance);
• the collateral benefits of auditing, beyond credibility;
• the critical operational challenges that threaten successful implementation.

Theme 1: The role of auditing in gaining user trust
The first and most striking theme is that the literature converges on auditing as the
main market mechanism to combat greenwashing and restore trust. Empirical studies
(e.g. Pflugrath, Eilifsen & Simnett, 2011) have repeatedly demonstrated that
sustainability reports that undergo independent verification are perceived by investors
and analysts as significantly more credible.

This need for credibility is exacerbated by market data. The fact that 85% of investors
perceive an increase in misleading statements and 88% of them demand regulations
to obtain useful data demonstrates an acute demand for validation. In this context, the
literature (Simnett et al., 2009) positions auditing not only as a technical exercise, but
as a strategic legitimization tool. The introduction of its mandatory nature through the
CSRD is seen as a recognition by the regulator that the market, left alone, has failed
to resolve the information asymmetry.

Topic 2: Limited vs. Reasonable disclosure
While there is consensus on the need for auditing, the most intense academic debate
revolves around the level of disclosure. The CSRD requires, at least in the initial
phase, obtaining limited disclosure. The specialized literature is divided on the
sufficiency of this measure.

On the one hand, (Eilifsen & Willekens, 2008) see it as a pragmatic first step, a
necessary "journey" to bring companies into compliance without imposing prohibitive
costs in the first year. This view is supported by recent studies that analyze the
determinants of reporting choice, demonstrating that smaller or less experienced firms
rationally choose limited disclosure, for reasons of cost and complexity [Martínez-
Ferrero & Ruiz-Barbadillo, 2022]. On the other hand, a significant body of critical
literature (Manetti & Toccafondi, 2012) warns of the risks of an “expectations gap”.

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