The limits of institutional work: a field study on auditors' efforts to promote sustainability assurance in a trust society

Hanna Silvola (Department of Accounting and Commercial Law, Hanken School of Economics, Helsinki, Finland)
Eija Vinnari (Tampere University, Tampere, Finland)

Accounting, Auditing & Accountability Journal

ISSN: 0951-3574

Article publication date: 2 September 2021

Issue publication date: 8 January 2021




The purpose of this paper is to enrich extant understanding of the role of both agency and context in the uptake of sustainability assurance. To this end, the authors examine auditors' attempts to promote sustainability assurance and establish it as a practice requiring the professional involvement of auditors.


Applying institutional work (Lawrence and Suddaby, 2006) and institutional logics (Thornton, 2002; Thornton et al., 2012) as the method theories, the authors examine interview data and a variety of documentary evidence collected in Finland, a small society characterized by social and environmental values, beliefs in functioning institutions and public trust in companies behaving responsibly.


With this study, the authors make two main contributions to extant literature. First, the authors illustrate the limits that society-level logics related to corporate social responsibility, together with the undermining or rejected institutional work of other agents, place especially on the political and cultural work undertaken by auditors. Second, the study responds to Power's (2003) call for country-specific studies by exploring a rather unique context, Finland, where societal trust in companies is arguably stronger than in many other countries and this trust appears to affect how actors perceive the need for sustainability assurance.


This is one of the few accounting studies that combines institutional logics and institutional work to study the uptake of a management fashion, in this case sustainability assurance.



Silvola, H. and Vinnari, E. (2021), "The limits of institutional work: a field study on auditors' efforts to promote sustainability assurance in a trust society", Accounting, Auditing & Accountability Journal, Vol. 34 No. 1, pp. 1-30.



Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

1. Introduction

This paper analyses auditors' attempts to promote sustainability assurance and establish it as a practice requiring the professional involvement of auditors. Over 20 years have passed since Power (1997a) presented his seminal book on the emergence of the audit society, in other words the unprecedented proliferation of auditing, assurance and verification procedures in various societal domains. Over the years, the array of such practices in the social and environmental domain has expanded from the verification of environmental reports to include the assurance of more extensive corporate social responsibility (CSR) or sustainability [1] reports. Sustainability assurance differs from financial auditing by being an unregulated, heterogeneous, largely voluntary practice [2] that can be undertaken not only by auditors but also by consultants. According to Power (1997a), such heterogeneity together with the inherent epistemological ambiguity of auditing fuel the diffusion of audit-like practices in contemporary society. He further argues (Power, 1997b) that the managerial turn, which has turned social and environmental concerns into issues to be managed, facilitates auditing professionals' attempts to conquer the practice from environmental consultants.

The proliferation of sustainability assurance has attracted considerable attention from accounting scholars interested in explaining and understanding this phenomenon. In general terms, Power (2000) has suggested that audit is a substitute for societal trust, and called for studies examining the extent to which his thesis holds in different institutional contexts (Power, 2003). In response, one stream of empirical studies has focused on the “demand side”, seeking to identify the institutional drivers of sustainability report assurance in various jurisdictions (e.g. Nitkin and Brooks, 1998; Kolk and Perego, 2010; Simnett et al., 2009). Another stream of studies has focused on the “supply side”, in other words the organizational or field level strategies deployed by auditing professionals to promote sustainability report assurance (O'Dwyer, 2011; O'Dwyer et al., 2011) and their aspirations to portray themselves as relevant experts in this field (Andon et al., 2014, 2015; Power, 1997b).

However, these two lines of inquiry into the factors and strategies propelling sustainability assurance remain largely separate. This is, to some extent, understandable due to their different ontological and epistemological assumptions. Yet, to us, the separation also appears somewhat artificial considering that these explanations are not mutually exclusive but rather complementary. Namely, the auditing professionals' attempts to promote the uptake of sustainability assurance on an organizational or field level are embedded in an institutional context comprising multiple logics that may be more or less conducive to such efforts, potentially setting limits to what can be achieved by active agents. This suggests the need for research that takes into account both active agency and more stabilized frames of reference when considering the increase (or not) of sustainability assurance.

Hence, our purpose in this paper is to enrich extant understanding of the role of both agency and context in the uptake of sustainability assurance. We do so by seeking to answer the following questions: How do auditors attempt to institutionalize sustainability assurance, particularly as an audit issue? How do their efforts interact with those of other actors as well as diverse logics? Our examination of these questions is informed by institutional theory, in particular the notions of institutional work and, although to a somewhat lesser extent, that of institutional logics. Institutional work has been defined as “the purposive action of individuals and organizations aimed at creating, maintaining and disrupting institutions” (Lawrence and Suddaby, 2006, p. 215). Institutional work is suitable for our purposes as it enables us to study the distributed, uncoordinated agency surrounding a management fashion (Perkmann and Spicer, 2008), particularly the efforts of a variety of actors, the occasional alignment or clashing of their interests and the intentions underlying their activities (Canning and O'Dwyer, 2016; Malsch and Gendron, 2013; Chiwamit et al., 2014). Institutional logics, on the other hand, refers to frames of reference through which actors make sense of the world, construct their identities and interact with the world around them (Thornton, 2002; Thornton et al., 2012). The mobilization of institutional logics in the present study facilitates an analysis of how various logics relate to the institutional work undertaken by auditing professionals to promote sustainability assurance.

Our empirical analysis is situated in Finland where both sustainability reporting and associated assurance have existed as voluntary practices since the early 1990s. Currently, some 160 Finnish firms produce sustainability reports and only about a fifth of these are independently assured (PwC, 2016). A theoretical reason for why Finland constitutes an interesting empirical environment for our study is that, contrary to the global trend, voluntary sustainability assurance has not increased in the country in the past few years, having stabilized as a practice only in a handful of listed companies. This is intriguing from the perspective of institutional theory as it suggests that the institutional work undertaken by Finnish auditors has been successful to an extent and then encountered limits of some sort. Prior work makes us alert to the possibility of there being not only supporting but also undermining forms of institutional work (Chiwamit et al., 2014) as well as to the fact that institutional work does not take place in a vacuum but always interacts with diverse institutional logics (Hampel et al., 2017; Lawrence et al., 2011; Zilber, 2013). The Finnish case therefore provides us with an opportunity to examine forms of institutional work supporting and resisting sustainability assurance as well as the role of institutional logics therein.

What makes Finland an empirically intriguing environment for our study is that, due to the small size of the country, we have been able to identify and interview the key representatives of all relevant actor groups as well as to support the interview findings by analyzing all sustainability assurance statements published in the country in a given year. Our main source of empirical material comprises 40 semi-structured interviews conducted between 2010 and 2016 with individuals representing auditor assurors, consultant assurors, corporate lobby groups, regulators, government offices, institutional investors, nongovernmental organizations (NGOs) and firms. Our secondary data consist of publicly available documents, such as all sustainability reports containing assurance statements, auditor assurors' and consultant assurors' promotional material, policy papers and drafts, stakeholder statements on legislative drafts and blog entries.

With this study, we make two main contributions [3] to extant knowledge on the proliferation of sustainability assurance. First, while much of previous research on the topic has focused either on the institutional drivers of the practice (Nitkin and Brooks, 1998; Kolk and Perego, 2010; Simnett et al., 2009) or auditors' efforts to promote it (Power, 1997a, b; O'Dwyer et al., 2011; Andon et al., 2014), our study brings together the examination of the role of both structure and agency in such developments. Mobilizing institutional work and institutional logics as our theoretical lenses, we illustrate how the supporting institutional work undertaken by auditors relates to undermining work undertaken by other actors and diverse institutional logics. Second, our study responds to Power's (2003) call for country-specific studies by exploring a rather unique context, Finland, where societal trust in companies is arguably stronger than in many other countries and this trust appears to affect how various actors perceive the need for sustainability assurance.

The paper proceeds as follows. In the second section, we review prior literature on the assurance of sustainability reports as well as outline our theoretical framework based on institutional work and institutional logics. In the third section, we describe our empirical research material and setting as well as elaborate on the methods of data collection and analysis. In the fourth section, we analyze our material through the theoretical framework introduced. In the final section, we discuss our findings in light of extant literature as well as present the conclusions and implications of our study.

2. The prior literature

2.1 The assurance of sustainability reports

According to recent surveys, both sustainability reporting and associated assurance are increasing, with 63% of the world's biggest firms (G250) having their sustainability reports independently assured (KPMG, 2016, p. 40). Within this group, 65% of assurance services are purchased from professional audit firms, while 35% are acquired from nonaudit service providers such as certification bodies and consultants (KPMG, 2016, p. 41). This development has attracted the attention of management and accounting scholars, resulting in an expanding literature (for a recent review, see, e.g. Gillet-Monjarret and Rivière-Giordano, 2017).

The two major streams [4] of accounting research that are most relevant for the present paper examine the drivers of sustainability assurance (demand side) and auditors' strategies to develop and legitimate the practice (supply side). First, there are functionalist studies that have examined the institutional and firm-level determinants of sustainability assurance, both in individual countries and globally. According to the study by Nitkin and Brooks (1998) of sustainability assurance in Canada, institutional factors driving the practice include public perception of sector-wide environmental issues and firms' exposure to legal liability. In a worldwide study comprising over 2,000 firms, Simnett et al. (2009) find that firms operating in sensitive industries, domiciled in countries with a strong legal environment and stakeholder orientation are more likely to have their sustainability reports assured and to choose an auditing professional as the assuror. Similarly, in an investigation of seven postindustrial countries, Darnall et al. (2009) find a positive association between corporate use of environmental audits and perceived stakeholder influence. Perego (2009) in turn argues that firms domiciled in countries with a weaker governance system are more likely to choose a Big4 accounting firm as assurance provider and that Big4 firms have a positive effect on assurance quality in terms of reporting format and assurance procedures. In a global study of country-level institutional factors driving sustainability report assurance, Kolk and Perego (2010) find that firms operating in countries with stakeholder-oriented legislation, weaker governance enforcement regime and public pressure for sustainable corporate practices are more likely to adopt the practice. Furthermore, their results indicate that companies operating in stakeholder-oriented countries are more likely to choose an auditing professional as the assuror. Wong et al. (2016) in turn find that factors positively associated with the choice of service provider include firm size, profitability, liquidity and societal pressure. Martínez-Ferrero and García-Sánchez (2017) explain that the corporate governance factors in stakeholder-oriented countries are related to the strength of the board's monitoring function. Finally, Peters and Romi (2015) find that the presence of a corporate sustainability officer is associated with increased demand for sustainability assurance.

Thus, by way of synthesis, there appears to be a broad academic consensus that public pressure on firms to exhibit sustainable practices as well as stakeholder-oriented legislation create demand for sustainability assurance. Likewise, apart from Kolk and Perego (2010), studies find that sustainability assurance is driven by a strong legal environment.

The second group of studies most relevant for the paper at hand has focused on the supply side, in other words the promotion of sustainability assurance and the role of auditors therein. Power (1997b) has examined the expansion of auditing to new areas, focusing on the representational strategies by which accountants have presented themselves as relevant experts in environmental auditing. Power (1997b) states that the various skills needed in environmental auditing compete for their position in the professional hierarchy, but the managerial emphasis in environmental regulation sets management skills at the top. This enables accountants to present themselves as experts using three strategies: by establishing sufficient similarity between accounting know-how and environmental auditing; by presenting auditing as a discrete set of skills in which accountants have a comparative advantage; and by subordinating competing claims from applied scientists (e.g. engineers) by referring to their knowledge as relating to narrow technicalities, something which can be acquired through subcontracting. Although his choice of topic is indicative of a critical stance, Power (1997b) explicitly refrains from passing judgment on whether the expansion of auditing into social and environmental domain is a positive development or not [5].

Similarly, the work of O'Dwyer and colleagues (O'Dwyer, 2011; O'Dwyer et al., 2011) focuses on the strategies and dynamics involved in practitioners' attempts to construct and legitimate sustainability assurance in the eyes of various audiences. Although not explicitly mobilizing institutional work as a method theory (Lukka and Vinnari, 2014), O'Dwyer (2011) highlights a key theme in that literature, namely, the fragile and indeterminate nature of attempts to create a new institution. In particular, O'Dwyer's (2011) case study of two Big4 professional service firms illustrates how difficult it is for auditors to transport the traditional methodology of financial auditing and the associated mindset to the domain of sustainability reporting, which is replete with qualitative information and recalcitrant to the traditional methods of auditing. He also notes the interprofessional tensions that emerge from accounting and nonaccounting assurors' differing notions as to what the aims of assurance are, what constitutes evidence and how such evidence should be interpreted.

O'Dwyer et al. (2011) in turn focus on the strategies employed by assurors in a large professional service firm to convince both external and internal audiences of the legitimacy of the practice. Applying Suchman's (1995) typology of legitimation strategies, O'Dwyer et al. (2011) demonstrate the interactions and overlaps between various types of legitimacy as well as the legitimation strategies that the assurors in a professional service firm used for each stakeholder group. With clients, pragmatic legitimacy was sought, and acquired, by highlighting the potential instrumental benefits of assurance, such as improving information systems and reporting quality as well as enhancing corporate image. With potential (nonclient) readers of assurance reports, particularly critical NGOs, the assurors sought to establish moral legitimacy by appealing to the socially desirable benefits that could be accrued through assurance. However, with this audience the auditors encountered difficulties as the NGOs appeared to exhibit little interest in the practice. Finally, to attract new report users that would pressure companies not only to retain assurance but also to expand its scope, the assurors sought to produce more credible statements and publicly argued for more extensive stakeholder involvement in assurance.

Although the analyses of Power (1997a, b), O'Dwyer (2011) and O'Dwyer et al. (2011) have enhanced our understanding of the accounting profession's aspirations to promote sustainability assurance, we still have limited knowledge of the nature of institutional work undertaken by auditors in conjunction with other agents' supporting or undermining institutional work and as conditioned by institutional logics. In our view, an examination of such issues is warranted by the observation that accounting firms have not been able to attain a dominating position in the markets for assurance services and the status of new forms of auditing remains contested (Andon et al., 2015, p. 1,407). Moreover, while prior analyses (e.g. O'Dwyer, 2011; O'Dwyer et al., 2011) have predominantly taken place at the organizational level, there is also a need for society-level investigations that provide the opportunity to analyze auditors' strategies while taking into consideration their embeddedness in macro-level structures such as institutional logics. The present field study complements extant research by undertaking such an examination, informed by recent work on institutional logics and institutional work as elaborated in the next section.

2.2 Institutional work and its relationship to institutional logics

Institutions can be defined as taken-for-granted “cultural-cognitive, normative and regulative elements that (…) provide stability and meaning to social life” (Scott, 1995, p. 33). Institutionalization in turn refers to certain practices becoming followed widely, without debate and exhibiting permanence (Tolbert and Zucker, 1983). During the evolution of new institutional sociology, scholars have paid varying degrees of attention to the role of agency in institutional development and change. While the foundational works in institutional theory (e.g. Meyer and Rowan, 1977) acknowledged the role of human agency in the creation of institutions, this aspect was later placed aside as attention shifted to institutional stability and the diffusion of institutions within organizational fields (e.g. DiMaggio and Powell, 1983). More recently, institutional theory has given rise to two parallel streams, institutional work and institutional logics, emphasizing respectively agency and structure.

2.2.1 Institutional work

The research on institutional work has its origins in studies of institutional entrepreneurship (DiMaggio, 1988; Garud, Hardy and Maguire, 2008; Greenwood and Suddaby, 2006; Battilana et al., 2009). It has attempted to address the agency gap in institutional theory by focusing on the purposeful activities by which an agent aims to create or modify institutions. Yet, the literature on institutional entrepreneurship has itself been criticized for presupposing superhuman agency (Lawrence et al., 2009), and the notion of institutional work has been offered as an alternative to redirect attention to the dynamics of collective agency.

Institutional work has been defined as “the purposive action of individuals and organizations aimed at creating, maintaining and disrupting institutions” (Lawrence and Suddaby, 2006, p. 215). This definition does not exclude ideas of institutional entrepreneurship but rather tempers them through its analytical focus on the efforts of a variety of individual actors and organizations equipped with different skills and having diverging motivations for their actions. Furthermore, the literature on institutional work acknowledges that collective agency may emerge spontaneously instead of being driven by a central powerful actor (Perkmann and Spicer, 2008; Zietsma and Lawrence, 2010; Chiwamit et al., 2014) and that the outcomes of such processes cannot always be predicted (Zilber, 2013; Modell, 2015). Yet, despite postulating such unpredictability, institutional work theorists remain adamant in their view of agency being embedded in institutions (Lawrence et al., 2011; Lawrence et al., 2013). Lawrence and Suddaby (2006) distinguish between three main categories of institutional work: disrupting, creating and maintaining institutions. As our analysis concerns auditing professionals' endeavors to institutionalize a management fashion, sustainability assurance, and we did not find indications of disrupting and maintaining work in our empirical material, in the following we will elaborate only on the three subtypes of institutional creation work (Perkmann and Spicer, 2008).

Creation of institutions

The creation of new institutions is the most populous category of Lawrence and Suddaby's (2006) framework, comprising several different types of work that can be grouped into political, technical and cultural work (Perkmann and Spicer, 2008) First, political work involves the enticement of actors into coalitions supporting the new institution (advocacy) as well as the establishment of rules that define which actors are allowed to adopt a practice (defining) and conferring rights or powers to particular groups (vesting) in order to establish a connection between an institution and the broader social system. Such work requires political skills, which enable institutional entrepreneurs to define the roles of other actors by illustrating how the interests of the latter are aligned with the institution in question. Examples of agents equipped with political skills include those adept in reconciling diverging interests, such as politicians, trade unions, lobbyists, industry associations and advocacy organizations (Perkmann and Spicer, 2008).

While political work establishes the foundation for an emerging institution, technical work provides recommendations or prescriptions for its functioning. Subtypes of technical work include mimicry, theorizing and educating (Lawrence and Suddaby, 2006). Mimicry involves associating new practices with already institutionalized practices, technologies and rules in order to ease adoption, while theorization refers to the development of abstractions as well as establishing causal relationships between elements. Educating relates to developing actors' knowledge and skills in using a management fashion, to support the new institution. The skills that institutional entrepreneurs require to accomplish the tasks involved in technical work include the ability to create abstract representations and models of an institution that are transportable from one context to another. Such skills of abstraction are usually associated with experts such as management scholars, technical consultancies and other experts (Perkmann and Spicer, 2008).

Finally, cultural work aims to increase actors' attachment to an institution in which they have no direct interest by establishing or reframing values and belief systems that are often linked to broader societal discourses. Cultural work consists of constructing actors' identities to make them susceptible to enacting the institution; changing normative associations by anchoring a practice in a society's moral and cultural framework; and constructing normative interorganizational networks that form a relevant peer group for those adopting the practice (Lawrence and Suddaby, 2006). To accomplish these tasks, institutional entrepreneurs require cultural skills which enable them to manipulate public views and opinions. Such skills are possessed by, for instance, professional organizations, journalists and management “gurus” (Perkmann and Spicer, 2008).

2.2.2 Institutional logics

The focus on structural stability is characteristic of the stream of research on institutional logics, which emerged from the early theorizing of Friedland and Alford (1991). Institutional logics has been defined as “the socially constructed, historical patterns of material practices, assumptions, values, beliefs, and rules by which individuals produce and reproduce their material subsistence, organize time and space, and provide meaning to their social realities” (Thornton and Ocasio, 2008, p. 101). Such logics thus convey an understanding of culture as being “anchored in a set of elemental building blocks, not just … “floating out there in thin air” (Thornton, 2004, p. 42). Based on prior work by Friedland and Alford (1991) as well as Thornton (2004), Thornton et al. (2012) present seven logics (family, community, religion, state, profession, market and corporation) together with building blocks that “represent the cultural symbols and material practices” characteristic of each (Thornton et al., 2012, p. 54). Thornton et al. (2012) highlight that each of these seven society-level logics becomes manifest on the levels of the field, organization and individual in various ways depending on the context studied. Regardless of the level, institutional logics provide actors with frames of reference that shape the way in which they make sense of the world, construct their identities and interact with the world around them (Thornton et al., 2012). In such interactions, logics enable actors to overcome their cognitive limitations and informational ambiguity by offering a set of rules for detecting problems, judging their salience and conceiving of potential solutions (Thornton, 2002).

The research on institutional logics is firmly grounded in the idea of embedded agency (Battilana and D'Aunno, 2009; Holm, 1995), implying that human beings are able to act but in doing so they inevitably draw on one or more logics, which may be complementary or conflicting (Battilana and Dorado, 2010; Greenwood and Suddaby, 2006). Consequently, research informed by institutional logics tends to downplay the significance of purposeful human agency in engendering institutional change, rather conceiving of such change as an evolutionary process conditioned by extant structures (Lounsbury and Boxenbaum, 2013; Zilber, 2013, 2017). It has therefore been pointed out that research on institutional change would benefit from combining institutional logics with the consideration of the active efforts of purposeful agents, and vice versa (Gawer and Phillips, 2013; Hampel et al., 2017).

In the subsequent sections, we will follow this advice, although our focus will be on institutional work and we will only consider the conditioning effects of institutional logics thereon. Thus, we will employ the typology of institutional creation work to structure our analysis and provide complementary observations regarding institutional logics where appropriate. First, however, we will elaborate on the empirical context of the study as well as our methods of data collection and analysis.

3. Empirical data, methods and context

3.1 Data and methods

We chose to conduct a field study as prior literature provides limited evidence on the research question in this environment (Ahrens and Dent, 1998; Lillis and Mundy, 2005). Gillet-Monjarret and Rivière-Giordano (2017) have particularly pointed toward the need to conduct case studies which consider the roles of assurance providers and other actors in the institutionalization of sustainability assurance. We have studied sustainability assurance from 2010, when it first attracted our attention, until the end of 2017. This forms a natural end point to our study as the EU directive on nonfinancial information (EU, 2014), which came into effect at the beginning of 2017, affects the reports compiled at the beginning of 2018 for the financial year 2017. The change from voluntary to compulsory disclosure of sustainability information in Finland may convey an increase in the assurance of the information and an extension of the data collection period beyond the end of 2017 would have thus changed our research setting. As there is no publicly available collated data on the key characteristics of assurance engagements in Finland, we conducted a systematic content analysis of all assurance statements published in 2015 to obtain a snapshot view of the current situation. The results of this state-of-the-art analysis are reported in Section 3.2.

Our primary source of empirical material comprises 40 interviews, which took place in 2010–2016 (see Table A1). All but three interviewees consented to having the interviews tape-recorded. In the two instances where tape recording was not allowed, extensive notes were taken during the interview and complemented immediately after the interview. We also kept a research diary, which was updated after our own project meetings, interviews and other, more informal meetings with informants during events such as seminars and training days aimed at practitioners. In total, the study yielded 45 h of interview material (41 h of which were recorded) and 15,000 words of research diary notes. The tape-recorded interviews were transcribed verbatim.

In the study at hand, the institutional field was identified as being sustainability assurance in Finland. Guided by Perkmann and Spicer's (2008) listing of key actor groups involved in institutionalizing a management fashion, we considered the following as key groups to be interviewed in order to gain a broad understanding of the practices and viewpoints associated with sustainability assurance: (1) Assurors including seven firms offering independent assurance services (each of the Big4 audit firms, one smaller audit firm, and one consulting firm); (2) Auditees including eight firms, three of which do not have their sustainability report independently assured [6]; (3) Stakeholders including five nongovernmental organizations (NGOs); (4) Institutional investors [7] including six investment managers focusing on responsible investments; (5) Regulators including three civil officials mandated with preparing national legislation regarding the implementation of the EU directive on nonfinancial reporting; (6) Supervisors including a national financial markets supervisor; (7) Associations including representatives from two trade associations and (8) Experts including an academic member of jury in the annual sustainability report competition.

Our second source of empirical material consists of publicly available documents such as sustainability reports, assurance statements, policy papers and drafts, organizations' webpages and blogs, the EU's public consultation documents related to the development of the Directive on nonfinancial reporting (EU, 2014) and expert statements on the changes proposed to Finnish Accounting Act to implement the said EU Directive. The public material provided us with a general view of the interviewees' organizations before the interviews and thereafter we employed these materials to confirm the information obtained. In addition, analyses of assurance reports and policy papers provided us with information on the development of, and trends in, sustainability assurance. The EU public consultation documents and the expert statements concerning the implementation of the Directive on nonfinancial reporting in Finland afforded us with insights on whether various institutional actors support or oppose sustainability assurance as a mandatory practice. Supplementing the evidence from the field, press releases concerning the results of the annual Corporate Responsibility Report Award and participation in public corporate responsibility events were further used to explore the voluntary assurance of sustainability reports in Finland.

In terms of analytical method, interviews were organized around the various factors that were considered to either promote or undermine the uptake of sustainability assurance. The interview questions were related to content and development of assurance work, drivers and motivations as well as challenges and barriers in stabilizing this practice. Subsequently, during the first round of analysis, the interview and documentary data were organized and analyzed according to the typology of institutional creation work (Lawrence and Suddaby, 2006; Perkmann and Spicer, 2008). In practice, we first coded all 40 interviews as well as the documents according to these typologies and then constructed a viewpoint for each actor group. As mentioned above, we did not find instances that could have unequivocally been considered examples of disrupting or maintaining work and therefore these categories have been omitted from the analytical sections. During the second round of analysis, the empirical material was viewed with the purpose of identifying field-level manifestations of various institutional logics that could be being associated with the previously identified forms of institutional work. As Thornton et al. (2012) point out, the seven logics and their constituent components are ideal types, implying that the manifestation of selected components is sufficient for the identification of a particular logic or combination of logics. Therefore, when analyzing the documentary data and interviews, we looked for words or phrases that could be connected to specific constituent elements of logics (see McPherson and Sauder, 2013; Schneider and Andreaus, 2018). Finally, the empirical material was then reviewed in relation to the research questions, and the findings were discussed among the authors to arrive at a joint interpretation.

3.2 Sustainability reporting and assurance in Finland

For most Finnish firms, the production and assurance of sustainability reports is voluntary; only state-owned enterprises (of which there are about a dozen) have been required to produce sustainability reports since 2011. The total number of sustainability reports published in Finland has remained relatively stable since 2011 with some 160 reports being published annually (PwC, 2016). Compared to the size of financial markets, the number of firms reporting on sustainability is rather large as only about 130 firms are listed on the Helsinki Stock Exchange. Figure 1 illustrates that third-party assurance of sustainability reports published in Finland has similarly remained rather stable since 2011 (PwC, 2016). In 2015, a total of 161 Finnish firms published a sustainability report and 36 of them had that report externally assured (PwC, 2016). Of these 36 assurance statements, 34 were made publicly available and according to our analysis, all statements except one were limited (as opposed to reasonable) reviews. In terms of service provider, auditors assured 27 (79%) sustainability reports and consultants as well as quality inspectors assured seven (21%) reports. One of the Big4 firms dominates the assurance market, having assured 14 (41%) sustainability reports in 2015. ISAE 3000 was the most often used assurance standard (in 21 cases) because it is mainly employed by auditors.

It seems that Finish auditors have a need to emphasize their professionalism by highlighting their use of the standard since Perego and Kolk (2012) report that the assurance standard is not usually specified in the assurance statements of large international firms. Finnish auditing assurors also explicitly mention in their statements that their work is independent assurance. In contrast, international studies have reported that assurors' independence is not always mentioned in the assurance statements (Bepari and Mollik, 2016; O'Dwyer and Owen, 2005). These facts may indicate that Finnish auditors have a greater need to prove their professionalism and independence than their international peers do because there are no professional qualification criteria for Finnish assurors. Of the 34 assurance statements, 29 (85%) were addressed to the management of the company and they all were assured by auditors. Two reports were addressed to both the management and stakeholders of the company and consultants assured them. Three assurance reports were addressed to nobody in particular. In summary, Finnish auditors more often provide evidence on their professional qualifications, independence and limitations than do consultants.

The most common activity undertaken during assurance engagements (see Table A2) was data assurance to test the accuracy and completeness of the information from original documents and systems on a sample basis (although there was quite a variation in the number of reported indicators assured; in some instances only one indicator was subject to assurance). Of the 34 assurance statements, 32 (94%) included a test of at least some data. Assurance usually included interviews with management as well as with individuals responsible for collection and reporting of the information. Sustainability assurance activities differ between auditor and consultant assurors indicating that the assurors do not share the standardized assurance practices or even the idea of what activities sustainability assurance should include.

The international step toward mandatory reporting was taken in September 2014 when the EU Directive on nonfinancial information was approved by the EU Council. The Directive requires publicly listed European companies with more than 500 employees to disclose on policies and risks related to human rights, employee-related issues, diversity and the environment. Member States had to transpose the Directive into national law by December 2016 and the first time firms had to report on nonfinancial information was for the financial year of 2017. Thus, this study examines the institutional work related to voluntary sustainability assurance from 2010 until the end of 2016. The Directive leaves it up to the member states to decide on whether to make sustainability assurance mandatory or not, and in Finland, the practice has not become mandatory.

3.3 Institutional and cultural context

In general, Finland has been characterized as a high-trust society (Korhonen and Seppälä, 2005). A European-wide survey found that 92% of Finns trust the police, 72% trust the court system, 42% trust the press and 41% trust environmental NGOs (European Values Study, 2009 [8]). These findings are complemented by the results of a recent national survey (T-Media, 2017), which found that 75% of respondents trust Finnish companies. According to Transparency International [9] (2018), which ranks 180 countries according to business actors' and experts' perceptions of public sector corruption, Finland is among the top three least corrupted countries in the world.

Moving on to CSR issues, Finland is characterized by a strong legal enforcement regime, stakeholder-oriented legislation and high public pressure toward CSR (Simnett et al., 2009). Panapanaan et al. (2009) list a number of characteristics of the Finnish CSR culture, including strong compliance with laws and regulations; shared moral principles based on social democratic values and a puritanical tradition; strong emphasis on trust and a tradition of good governance. They also note how the small size of the country leads to a close-knit society where “everybody knows everybody” and news of corporate malfeasance quickly become common knowledge. The interview-based findings of Panapanaan et al. (2009) are supported by the responses obtained in a survey commissioned by the European Commission (2013), selected results of which are presented in Table 1.

As can be seen from Table 1, a considerable share of Finns at least claims an interest in CSR issues. Similarly, according to a recent national survey (T-Media, 2017), 94% of Finns consider it quite important or very important to take care of the environment. Further, Table 1 indicates that about half of Finns believe that large firms make attempts to behave responsibly, whereas the same belief is held by less than half of EU residents. Finland is also characterized by a more positive attitude toward small and mid-sized enterprises (SMEs) than EU countries on average, with 83% of Finns believing in the responsibility aspirations of SMEs.

Thus, within the limits of what large-scale surveys can capture, we can already identify some constituent components which suggest that the CSR culture prevailing in Finland is anchored in a “good corporate citizen” logic, which we see as a manifestation of the community logic in the field of sustainability assurance. The root metaphor of the “good corporate citizen” logic is a common national boundary, while legitimacy emanates from belief in trust and reciprocity between civic society and Finnish companies, especially SMEs. The sources of authority in turn comprise commitment to social democratic values, compliance with laws and regulations as well as principles of good governance. The informal control system associated with this logic is the visibility of company actions in a small country, captured in the phrase “everybody knows everybody” (Panapanaan et al., 2009).

Further below, in the context of exploring forms of institutional work undertaken by auditors and other societal groups to support or undermine sustainability assurance, we will also examine the types of institutional logics drawn upon by these groups when undertaking such work. In the following section, we provide a table that summarize the forms of institutional work identified as well as the institutional logics that could be interpreted as being associated with those forms of work.

4. Institutional work undertaken to promote or undermine sustainability assurance

The main findings of our analysis regarding the institutional work undertaken (or not) by key actor groups are summarized in Table 2. Below, we elaborate on each type of work.

4.1 Political work

4.1.1 Supporting advocacy work

Political work in the form of advocacy, defining and vesting constitutes the first form of work associated with the creation of an institution (Lawrence and Suddaby, 2006; Perkmann and Spicer, 2008). As expected, the auditing profession has attempted to institutionalize sustainability assurance by advocating that it be made a compulsory practice. Such advocacy work can be detected for instance in Big4 firms' responses to the EU's 2010–2012 Consultation regarding the then proposed Directive on nonfinancial reporting, where the Big4 firms unanimously endorse mandatory sustainability reporting and assurance. One of our Finnish Ministry interviewees confirmed that the auditing firms' advocacy efforts have mainly taken place at the EU level because the EU Directives dictate the legislative framework according to which member states must revise their respective national acts and decrees (Ministry representative, interview #13). In terms of institutional logics, prior research has convincingly argued that the expansion of audit-like services is reflected in audit firms having shifted from a professional logic to a blend of professional and commercial logics dominated by the latter element (Cooper and Robson, 2006; Malsch and Gendron, 2013; Greenwood and Suddaby, 2006). Considering that the focus of the present study is on why the auditors' institutional work has not succeeded to a very great extent, we are more interested in the role of logics in hampering the institutionalization of sustainability assurance. Therefore, our assumption is that such a blended logic acts as a frame of reference for auditors also in the case at hand.

The auditors' EU-level advocacy efforts are paralleled by similar institutional work undertaken by two Finnish NGOs, Finnwatch and Kepa, focusing respectively on corporate responsibility and global development, who also endorsed mandatory assurance in their response to the EU consultation by referring to problems in large Finnish firms' sustainability report coverage:

Many companies focus on issues that are not controversial, and leave out important environmental, social or even human rights impacts associated with their activities. Because of this and the fact that many companies do not disclose any non-financial information at all, the general public, shareholders, investors and other stakeholders do not have access to the adequate information to assess the company's [sic] accountability. (Finnwatch and Kepa joint response to EU Consultation)

The NGOs elaborated in their response that mandatory external assurance is required to prevent large companies from providing misleading information. When an expert statement concerning the implementation of the Directive in Finland was solicited from Finnwatch, they again endorsed mandatory assurance to temper large corporations' efforts at greenwashing (Finnwatch expert statement on HE 2808/2016). As concerns institutional logics, the NGOs' references to “the general public”, “other stakeholders” and “information to assess […] accountability” indicate that in advocating mandatory sustainability assurance they draw on a logic of public interest, which emphasizes companies' accountability to all stakeholders, not only shareholders. This logic can be considered a field-level manifestation of the community logic, and in this case, it makes NGOs' institutional work efforts aligned with those of the auditors.

4.1.2 Undermining advocacy work

The auditors' advocacy work to institutionalize sustainability assurance has been directly countered by contradictory forms of political work undertaken by political bodies and influential interest organizations. The Finnish Ministry of Employment and the Economy (henceforth “the Ministry”) as well as business lobby groups have overtly resisted obligatory sustainability assurance. In its response to the EU's public consultation regarding the Directive on nonfinancial reporting, the Ministry opposed both compulsory nonfinancial reporting and assurance, justifying the latter stance as follows:

Disclosed non-financial information should not be audited by external auditors. Such auditing requirement would only benefit large auditing companies. The auditors have not [sic] such competence. The administrative burden and costs caused by additional mandatory reporting and thereto related external auditing would add the costs of most companies to an unbearable level. (Ministry of Employment and the Economy response to EU Consultation)

In the response above, the references to an unfair competitive advantage given to large auditing firms as well as the additional costs to be borne by other companies are indicative of a market logic focusing on the efficiency and profitability of business operations.

Citing the same ground of avoiding an increase in firms' administrative burden, the Ministry has chosen not to make assurance compulsory when implementing the said EU Directive in Finland (Government of Finland, 2016). This decision is associated with the government program (Prime Minister's Office, 2015), an official, widely publicized document that set out the agenda of the government that was in office at the time. The major themes of the right-leaning conservative government's Program included strengthening the role of businesses, increasing entrepreneurship and cutting down “excessive” regulation (Prime Minister's Office, 2015, p. 8), each of which points toward the government's actions being informed by a market logic. Likewise, the market logic is reflected in the government's key aims as presented in the program: “Operating costs in industry will not be increased by the Government during the parliamentary term” (Prime Minister's Office, 2015, p. 10) and “No further national regulatory measures will be taken in connection with the implementation of EU regulations” (Prime Minister's Office, 2015, p. 28). During our interviews, a Ministry representative referred explicitly to the government program when rationalizing why they had not made assurance compulsory:

As concerns CSR regulation, Finland is such a small country and such a small market that we are not very keen to introduce our own legislation on those topics. Plus, we have this programme to minimize administrative burden, and all the while the EU churns out quite enough of such [CSR] regulation. (Interviewee # 25, Ministry of Employment and the Economy)

In other words, when the Directive on nonfinancial reporting was accepted in the EU with allowance for national discretion regarding whether or not to make sustainability assurance compulsory, it was already common knowledge that the Ministry responsible for the Directive's implementation in Finland would be bound by the government program's aims to avoid regulation and imposing new costs on firms. The market logic drawn on by the government and the Ministry provides a plausible explanation for why the Ministry did not make sustainability assurance mandatory and why the auditing profession rejected (Canning and O'Dwyer, 2016) national-level advocacy work to promote it.

Two business lobby groups, the Finnish Chamber of Commerce and the Confederation of Finnish Industries, have also conducted undermining political work by resisting sustainability assurance in their responses to the EU Consultation:

Auditors have no expertise in the field of non-financial information. This requirement would force auditors to acquire training in these matters. We believe that such a requirement would increase the administrative burden of companies without any real profit from the new obligation. (Finnish Chamber of Commerce)

Should companies wish that the non-financial information they have provided is to be verified or rated, there are analysts at the market that are specialized to do exactly this kind of evaluation. (Confederation of Finnish Industries)

These two excerpts contain explicit references to the profitability aspect that is core to a market logic (“without any real profit”). In addition, both refer more implicitly to another element of the market logic, namely efficiency, by implying that it would be inefficient for auditors to invest time in acquiring additional skills that are already possessed by market analysts.

In addition to the promoting institutional work undertaken by auditors and NGOs as well as the undermining work undertaken by the Ministry and lobby groups, there is a third form of action, or rather inaction, associated with the institutionalization of sustainability assurance. This is the rejection of political work by the Prime Minister's office, whose frame of reference could also be labeled as the good corporate citizen logic. The Prime Minister's office is responsible for the governance of Finland's state-owned enterprises, which range from internationally operating stock-listed companies to small, unlisted firms with a statutory purpose. The state-owned enterprises are usually considered to be in the vanguard of good governance initiatives that are subsequently adopted by “regular” companies (Interviewee #26). This frontrunner spirit and its association with the good corporate citizen logic is reflected in the policy paper produced by the Prime Minister's office (Government's Decision-in-principle Regarding the State's Corporate Governance Policy, 13.5.2016):

State-owned enterprises must set an example of value-based management and social responsibility (…) Social responsibility is based on the principle that a company as part of society performs well if the surrounding society fares well. (…) As a good corporate citizen, the company ensures society's long-term development and renewal.

Hence, the Prime Minister's office could undertake political work to support the institutionalization of sustainability assurance by making it compulsory for state-owned enterprises. However, even though sustainability reporting has been mandatory for these enterprises since 2011, assurance is not even mentioned in the policy document cited above. A representative from the office explained the reasoning behind this policy as follows:

We recommend that each [state-owned] company chooses a [CSR] framework that suits it best. The framework might include reporting and assurance, or it might be just a more general guideline. If the framework is GRI, then I think assurance makes sense. But if some general guideline suits the company better, it is fine with us, as long as the company has reflected on the matter and decided that it is best for them. (Interviewee #26)

The foregoing suggests that the Prime Minister's office trusts state-owned enterprises to operate as good corporate citizens without overly detailed demands. The office therefore sees no need to engage in political work to promote sustainability assurance.

To summarize, auditors drawing on a blend of professional and commercial logics have undertaken EU-level advocacy work to make sustainability assurance compulsory. Their efforts have been supported by similar work undertaken by NGOs drawing on a logic of public interest that emphasizes accountability to the surrounding community. However, the auditors' political work has been undermined by the Ministry's and business lobby groups' simultaneous resisting advocacy work. These actor groups, informed by a market logic, have resisted mandatory assurance on the basis that it would not improve profitability but instead would result in added costs and inefficiency. Finally, the Prime Minister's office, drawing on the good corporate citizen logic, has abstained from political work related to sustainability assurance. Thus, in total, the amount of undermining political work appears to considerably exceed the amount of promoting work. Although the outcome of institutional work is more than a simple sum of its parts, this already gives an indication of why auditors' efforts to entrench sustainability assurance in Finland have proved rather unsuccessful.

4.2 Technical work

Technical work makes up the second category of creation work, consisting of mimicry, education, theorization and standardization (Lawrence and Suddaby, 2006; Perkmann and Spicer, 2008). A considerable extent of mimicry is naturally involved in sustainability assurance as the formulation of the statements, at least of those written by assurors from Big4 firms, bears resemblance to financial audit statements (see also Power, 1997b). Likewise, the assurance statements as well as the auditing firms' websites often foreground the strictness of their internal control procedures due particularly to the firms being involved in financial auditing.

Mimicry also extends to the involvement in sustainability assurance of financial auditors and other individuals, apparently because they are believed to lend legitimacy to the practice:

The make-up of an assurance team is dictated by the regular practices of firms like us [Big4]. A partner needs to be involved. And then, if we are conducting assurance for a firm that is also our financial auditing client, then the partner responsible for that needs to be involved. And then of course a project leader and a sufficient number of auditors. (Assuror, Interview #12)

From our data, we also identified educating by assurors as a form of technical work driving the institutionalization of sustainability assurance. This can take place in the form of concrete education, as explained by one of the interviewed corporate representatives:

For several years, they [assurors] have arranged training days for us. Like, half-day sessions where they tell us what's happening in the field of sustainability, what the latest trends are, and so on. (Sustainability manager, interview #16)

Education work can also take place in the form of recommendations to management, which can be included either in the public assurance statements or in the assurors' letters produced exclusively for the management team. When included in the public statements, such recommendations constitute a form of education directed not only to the client company but also at other firms looking to outperform their competitors in CSR.

Thus, we can say that auditors have engaged in technical work to promote sustainability assurance through mimicry and education. However, our results in terms of other forms of technical work, particularly standardization, are mixed. The issues we identified in this respect relate to reporting frameworks as well as assurance methodology and tools. The first problem relates to assurance standards: there is no agreement on which standards can be used and by whom. Auditing assurors have until recently enjoyed a competitive advantage as only they have been allowed to apply the ISAE 3000 standard in their assurance work. However, in December 2015 the IASB released the use of that standard to all assurance providers, including consulting assurors, thus removing auditors' competitive advantage in this respect (see Channuntapipat et al., 2020).

The second technical issue is the lack of a generally agreed reporting framework to serve as the basis of sustainability assurance. The content of assurance is very much associated with the underlying reporting framework:

It is a bit like assembling furniture. You have the assembly instructions that you get from IKEA when you buy a piece of furniture. Then you can look at the completed piece and tell if it has been assembled according to the instructions or not. There is nothing like that in sustainability reporting. GRI is the only proper framework at the moment but it is not mandatory. (Assurance provider, interview #19)

In this case, some attempts at standardization can be argued to exist. The Big4 firms make full use of GRI, while consulting assurors apply their own tailor-made principles which may or may not include parts of GRI. By consistently applying GRI the Big4 are arguably trying to create a specific “vision” of what sustainability assurance should look like (see Channuntapipat et al., 2019), not only in terms of the reporting framework to be applied but also in terms of who should conduct such engagements. As competition is fierce, standardization work that associates a widely used reporting format with assurance undertaken by auditors helps Big4 firms defend their market share against consulting assurors.

Yet, auditors appear to undertake standardization work only to the extent that it helps in defining assurance as a practice requiring their specific professional competence. Namely, auditing firms also compete with each other and this latter type of competition has led each of them to develop their own assurance approaches, methodologies and tools. In this context, an interesting observation relates to the contrasting ways in which auditors perceived the consultative element sometimes included in assurance engagements. On the one hand, assurance tools that did not emulate financial audit tools were dismissed as “consultative” and therefore antithetical to auditing, as firmly stated by one of our interviewees:

I think media analysis is not an assurance procedure. If you list media analysis as an assurance procedure, you have listed a consultancy procedure. In other words, you can consultatively go through a client's stakeholders to find out their views about the client, but by no means does that provide any kind of assurance. (Assuror, Interview #31)

The interviewee explicitly mentioned their efforts to make assurance similar, if not even equal, to auditing:

The spirit of assurance has been a little consultative, so to speak. But I would want to see it become more like auditing. In my work I have tried, and still try, to change it towards that direction. I hope that clients would also understand that this change will benefit them and they would then purchase the service. (Assuror, interview #31)

On the other hand, another interviewee perceived consultation to be necessary because it is something clients expect:

Based on what I've seen, companies want more than just that stamp on the paper, they expect a consultative approach to assurance. They just do not want to pay extra for it. So, we try to tell them what the difference is between producing a stamp and something that is more expensive and takes more time, in other words a consultative commission. (Assuror, Interview #5)

The lack of standardization work with respect to assurance tools is in stark contrast to the uniform “vision” of sustainability assurance that auditors promote when trying to institutionalize it as a practice requiring the involvement of auditors, not consultants.

Thus, examined through the lens of institutional work, our empirical material suggests that auditors undertake technical work to promote sustainability assurance through, first, mimicking financial auditing and educating company representatives of the practices. Second, as a means of establishing a vision of sustainability assurance as a practice requiring the involvement of auditors, they also undertake standardization work by applying GRI as the sustainability reporting standard of choice. However, simultaneously, competition between Big4 firms seems to lead to partial rejection of standardization work and instead prompt the development of diverse, unstandardized assurance tools and approaches. The respondents' strongly diverging views on “consultative work”, both in the form of specific tools and more generally, is illustrative of such developments. Hence, because of such mixed findings, the overall effect of technical work, or lack thereof, is difficult to assess.

4.3 Cultural work

The third main form of creation work is cultural work that comprises the construction of actors' identities, normative relationships and normative networks (Lawrence and Suddaby, 2006; Perkmann and Spicer, 2008).

The Finnish auditing profession has undertaken cultural work by attempting to construct a normative network through the national Corporate Social Responsibility Reporting Competition that has been organized annually since 1996 by FIBS, the Finnish corporate responsibility network. The organizing committee, which decides on the evaluation criteria of the reports, consists of representatives of FIBS, the Ministry, a responsible investors' association, a business school, the Finnish Stock Exchange and the Association of Finnish Auditors. The competition's expert panel, which evaluates the reports, comprises one representative from each of the Big4 firms. Interestingly, a partner from the market leading Big4 audit firm is involved in the competition in two different roles: in the organizing committee as a representative of the Finnish Auditors' Association, and in the expert panel evaluating the reports. As will be elaborated further below, he/she has also undertaken other forms of cultural work to institutionalize sustainability assurance.

To be eligible for nomination in the competition, a firm's sustainability report must “fulfill the reporting criteria of a good international corporate responsibility framework, in practice those of the Global Reporting Initiative guidelines” (Business association, #32). The competition's expert panel automatically reviews the reports of all listed companies, in addition to which nonlisted firms can voluntarily sign up for the competition [10]. The evaluation criteria include awarding points for sustainability reports that have been assured. The competition could, at least in principle, be an effective form of cultural work since the winner automatically receives image benefits through media attention once the winners have been declared.

Another visible attempt to construct a normative network is undertaken by the market-leading Big4 firm, especially the partner mentioned above, through the Corporate Responsibility Barometer, a report the firm has published annually since 2009. In essence, the barometer charts developments in, and offers auditor commentaries on, how Finnish companies manage and report on sustainability issues. One of the aims of the report is stated as being “To challenge companies to develop”, which arguably translates into an exhortation for companies to increase their efforts in sustainability management, reporting and assurance. The foreword to the report is usually written by the partner mentioned above who heads the auditing firm's corporate responsibility services and whom many of our interviewees credited for introducing the practice of sustainability assurance in Finland. In the context of discussing the implications of the EU Directive on nonfinancial reporting, the partner suggests in the latest Responsibility Barometer's foreword why it would be a good idea for firms to purchase assurance:

For many board members, the requirement to sign off on non-financial information has increased awareness of their liability in these matters. The Boards' duty of care has also led to questions concerning whether the reliability of the information has been secured for instance through assurance. I therefore believe that assurance will increase.

Similarly, in a recent blog post, the partner borrows a contemporary fashion term “cloudy transparency” when referring to sustainability reports that have not been assured:

I recommend it [assurance] to all corporate responsibility reporting [hyperlink to audit firm's corresponding webpage] and particularly to the non-financial information that the Board will undersign either as part of the annual report or as a separate account. Apparent transparency is only cloudy transparency.

In these writings the partner could be seen as undertaking cultural work by constructing normative identities. More specifically, he/she is insinuating that also in the case of nonfinancial information, there is asymmetry of information between stakeholders and management, resulting in the classic principal-agent setting that first gave rise to financial auditing. Analogously, he/she suggests, Boards of Directors who take their duties seriously and understand the litigation risks involved, need to demand that the nonfinancial information produced within the company is assured before they accept to bear the responsibility for its accuracy.

However, this type of cultural work seems to have had little impact on the demand for sustainability assurance. According to our interpretation, attempts to create normative identities and expectations susceptible to the proliferation of the practice are contrary to the good corporate citizen logic reflected by citizens' responses to the EU survey and also drawn upon by the business lobby groups and the Prime Minister's office as analyzed in the foregoing. As an illustration of how the corporate citizen logic relates to the cultural work undertaken by the auditors, let us consider institutional investors. This actor group is usually said to drive the demand for sustainability assurance but in Finland they have abstained from doing so. A representative from a Finnish investment fund referred to cultural aspects when commenting on the extent of sustainability assurance in Finland:

In some cultures, there may be bigger suspicions about whether or not firms have done their business properly (…) And then it's natural they purchase these kinds of services [sustainability assurance]. However, Finnish investors know Finnish companies quite well, they are actually insiders in these firms. Pension funds, for example, are significant owners of Finnish companies and they are very much involved in those companies' governing bodies. This is a small country, so people are quite close to things. (Responsible investor, #37)

This comment contains elements of the corporate citizen logic, with the boundaries of the community – including companies, coinciding with the national boundaries. It clearly reflects the characterization of Finland as a small, close-knit society where everybody knows everybody and trust is more prevalent than distrust (Panapanaan et al., 2009). The interviewee also maintains that there is only a small distance between stakeholders and company management; a statement that directly counters the senior auditor's attempt to construct a distance between those two groups. The interviewee continued that asymmetry of information, which is the major reason for auditing and assurance, constitutes a problem in markets with a larger number of participants. In Finland, where the number of stock-listed companies is small and the share of foreign ownership is similarly small, such a problem rarely arises. Even the neighboring country Sweden, which is also a Nordic welfare state with high trust in institutions, the stock market is already larger and more international [11]. In this context, proximity fosters trust: since institutional investors are close to, or even have a board seat in, Finnish companies, they come to know the management personally and trust the firms to behave as good citizens without the need for further monitoring.

Further, as explained in the context of political work, the Prime Minister's office has not made sustainability assurance compulsory for state-owned enterprises. This decision, which we see as being informed by the good corporate citizen logic, can also be considered to constitute a rejection of cultural work since state-owned enterprises are considered frontrunners who create normative networks around phenomena such as CSR. In other words, if the situation had been different such that the office had promoted sustainability assurance, it would have engaged in both political and cultural work simultaneously. This could have played a major promoting role in the web of activities surrounding sustainability assurance.

Thus, contemplated from the perspective of institutional work, we can say that auditors have engaged in cultural work to promote sustainability assurance by attempting to construct normative networks and identities. However, their work appears to have encountered an obstacle in the form institutional investors' and the Prime Minister's office's rejection of cultural work. We see this rejection as being associated with the good corporate citizen logic, a field-level manifestation of the community logic whereby the community encompasses the whole country and companies are perceived mainly in benevolent terms. Since institutional investors and the Prime Minister's office as representatives of the firms' major owners are key stakeholder groups, their trust in Finnish companies and the associated rejection of cultural work to promote sustainability assurance constitutes a significant societal signal of the felt redundancy of the practice.

5. Discussion and conclusions

Prior research attempting to explain the uptake of sustainability assurance has focused either on its macro-level institutional drivers (e.g. Nitkin and Brooks, 1998; Kolk and Perego, 2010; Simnett et al., 2009) or on auditors' micro-level strategies to legitimate the practice (O'Dwyer, 2011; O'Dwyer et al., 2011; Power, 1997b). We have sought to straddle this division by considering both of these aspects when analyzing auditors' attempts to claim the sustainability space. In particular, we have sought to answer two research questions: How do auditors promote sustainability assurance, especially as an audit issue? How do their efforts interact with those of other actors as well as diverse societal logics? As previous analyses have focused, to a large extent, on what might be called success stories, we considered it worthwhile to highlight also the obstacles that can undermine the institutionalization of the practice. Applying institutional work (Lawrence and Suddaby, 2006) and institutional logics (Thornton and Ocasio, 2008; Thornton et al., 2012) as our method theories, we examined interview data and a variety of documentary evidence collected in Finland, where sustainability assurance appears to have become a stabilized practice only among the 36 largest international stock-listed companies out of a total of 161 sustainability reporters. In other words, the Finnish context enabled us to analyze a situation where the institutional work undertaken by auditors has been successful to an extent and then encountered limits of some sort. Mindful of previous studies, we anticipated the possibility of finding evidence of both supporting and undermining forms of institutional work as well as of the conditioning effect of institutional logics.

To summarize our empirical findings, we noted that Finnish auditors have engaged in EU-level political work by advocating compulsory sustainability assurance. Their political efforts have been supported by parallel advocacy work undertaken by NGOs informed by a public interest logic but countered by the undermining political work undertaken by the Ministry responsible for the implementation of the EU Directive in Finland and business lobby groups, informed by a market logic. We suggest that the government's commonly known, explicit promise not to increase firms' costs or undertake additional regulatory measures in the context of implementing EU directives effectively resulted in auditors' rejection (Canning and O'Dwyer, 2016) of national-level advocacy work. Moreover, the Prime Minister's office, drawing on the good corporate citizen logic, has refrained from political work as it has not made sustainability assurance mandatory for state-owned enterprises.

In terms of technical work, we found that, as could be expected, auditors have educated firms on sustainability assurance by arranging training and, more indirectly, by offering management recommendations in public assurance statements. The auditing profession has also engaged in mimicry by emphasizing similarities between sustainability assurance and financial auditing (Power, 1997b; O'Dwyer, 2011), and by foregrounding their robust internal controls and systematic methodology. The more ambiguous aspects of technical work we identified related to the partially rejected standardization of the practice, especially regarding sustainability reporting frameworks as well as assurance tools. Our analysis suggests that two issues are at stake in the limited standardization of sustainability assurance, namely, interprofessional and intraprofessional competition in a small national market for assurance services. When engaged in interprofessional competition against consultants, Big4 auditors join forces in attempting to standardize the GRI as the preferred sustainability reporting framework to be utilized. On the other hand, the rejection of standardization work in terms of assurance approaches and tools benefits the firms in their intraprofessional competition. Thus, the Finnish auditing profession is in a paradoxical situation where it is simultaneously trying to both promote and undermine the standardization of sustainability assurance.

Finally, in terms of cultural work, we noted the market leading Big4 firm's attempt to create a normative network by publishing the annual Corporate Responsibility Barometer as well as participating actively in the organization of the annual Corporate Responsibility Reporting Competition. Further, the partner responsible for corporate responsibility services in that Big4 company could plausibly be called an institutional entrepreneur as he/she was the one who, according to several interviewees, first introduced sustainability assurance to Finland and has continued to champion the practice through, for instance, a personal blog. He/she has also engaged in the creation of normative identities by suggesting that there is a distance between companies and stakeholders, and that sensible, litigation-averse board members should require the companies to purchase sustainability assurance. Yet, despite these attempts, it appears that auditors have not succeeded in creating a normative network around sustainability assurance in Finland that would extend beyond major listed companies with international ownership. Our analysis indicates that one explanation for the lack of demand for sustainability assurance lies in institutional investors' and the Prime Minister's office's rejection to undertake cultural work to promote the practice. Our findings suggest that Finnish institutional investors and the Prime Minister's office draw on the good corporate citizen logic, which perceives the whole of Finland to make up a close-knit community, benevolent companies included. This contrasts with many other jurisdictions where institutional investors are usually perceived as a powerful driving force behind sustainability assurance.

Moving on to contemplate our results in theoretical terms, our numerous observations of political work lend support to previous research which has argued that institutional entrepreneurship is a fundamentally political process (Fligstein, 1997; Seo and Creed, 2002; Garud et al., 2007). Especially in the institutional creation phase characterized by an absence of formal regulations, actors appear to invest much time and effort into both supporting and undermining political work.

A core idea of institutional work is that it comprises the efforts of a variety of groups whose interests may or may not be aligned. In this respect, our findings suggest that the alignment of actors' interests is often associated with a common logic informing their respective actions. In our case, the Finnish Government, the Ministry of Employment and the Economy, and the business lobby groups all appeared to draw on the same (market) logic when undertaking political work to resist mandatory sustainability assurance. Likewise, the institutional investors and the Prime Minister's office both referred to elements of the good corporate citizen logic when justifying their lack of engagement in cultural work and, in the case of the office, political work. However, while the logic guiding some actor groups, such as the business lobby, arguably remains largely unchanged over time, the same cannot be said about all of them. Especially in multiparty political systems, the government's composition in a given period depends on the electorate and the negotiations among the political parties postelection. If, at the time of our analysis, Finland had been governed by a left-wing government drawing on a public interest logic, its interests might have been parallel to those of the auditors and the regulatory outcome might have been favorable to the latter. This observation underlines the importance of avoiding overly essentialist conceptions of actor groups' interests when analyzing the joint influence of institutional work and institutional logics.

Yet, some of our findings concerning the interplay of institutional work and institutional logics are rather mixed. Auditors and business lobby groups for instance both draw on the market logic but this guides them to engage in opposite forms of institutional work. In our view, this could be due to the differing foci of these actor groups. While auditors focus on growing their share of the professional services market, the lobby groups seek the greatest good for the greatest number of companies in the form of lesser costs. In more general terms, we could say that the interests of actor groups informed by the same logic may also clash, depending on the level on which these actors operate. A second paradoxical finding relates to the auditors undertaking both resisting and supporting forms of standardization work, which, as explained in the foregoing, we see as emerging from a combination of inter- and intraprofessional competition informed by the market logic. This observation indicates that in some instances the market logic is probably too generic a term, and it would be useful to analyze it in a more nuanced fashion.

Our findings also point to the significance of rejected institutional work, an aspect that has received little attention in prior literature (but see Canning and O'Dwyer, 2016). In our case, two key actor groups who could have undertaken cultural work to create a normative network around sustainability assurance, have refrained from doing so, and this appears to have played a major part in preventing its entrenchment. Previous research on supporting and resisting forms of institutional work (Chiwamit et al., 2014) has proposed that the legitimacy of a management fashion is defined during a conflictual process as diverse actors vie for power. To this finding we can add that an actor group can also contribute to the outcome of an institutionalization struggle by rejecting institutional work.

Finally, in our analysis we identified a novel manifestation of the community logic and labeled this as the good corporate citizen logic. Rooted in ideas of trust, democratic values and close-knit communities, this logic connects our analysis to Power (1997a), which argues that audit is a substitute for democracy, and Power (2000), which posits that an audit society is a less trusting society. Our study differs from Power (1997a) in that his thesis concerned especially society's lack of trust in public sector organizations, the operation of which is largely limited to a specific jurisdiction. Our analysis suggests that in a small country the community logic characterized by mutual trust can also extend to companies. When prominent and powerful actor groups perceive the latter as good corporate citizens and form relationships with them through for instance board memberships, assurance is not perceived necessary.

To conclude, with this study we offer two main contributions to the prior literature. First, while much of previous research on the topic has focused either on the institutional drivers of the practice (Nitkin and Brooks, 1998; Kolk and Perego, 2010; Simnett et al., 2009) or auditors' efforts to promote it (Power, 1997a, b; O'Dwyer et al., 2011; Andon et al., 2014), our study brings together the examination of the role of both structure and agency in such developments. Mobilizing institutional work and institutional logics as our theoretical lenses, we illustrate how the supporting institutional work undertaken by auditors relates to undermining work undertaken by other actors and diverse institutional logics. Our findings illustrate that the uptake of sustainability assurance involves an interplay of various agents' more or less coordinated, supporting or undermining efforts as well as the conditioning effects of institutional logics. Second, our study responds to Power's (2003) call for country-specific studies by exploring a rather unique context, Finland, where societal trust in companies and in auditing is arguably stronger than in many other countries and this trust appears to affect how various actors perceive the need for sustainability assurance.

In terms of societal implications, after being presented with the preliminary results of our study in December 2019, the Finnish Association of Authorised Public Accountants undertook the task of standardizing the sustainability assurance process in Finland. Time will tell if this institutional standardization work makes a difference with respect to the proliferation of the practice.

With regard to the limitations of the study, our analysis can be characterized as being polyvocal in the sense that we have considered the views of several different actor groups. The inevitable tradeoff from such a broad analysis is that we have not been able to devote space to a detailed consideration of each group and the logic(s) informing their actions. This is something that can be envisaged to be picked up by future research.

As concerns other options for future research, it will be interesting to observe whether sustainability reporting will become more standardized and how such a development will affect the sustainability assurance process and its scope and subsequently stakeholder perceptions of, and participation in, the practice. The role of firms' governing boards in assurance will also open up interesting new research avenues. Finally, to complement our findings regarding the creation work undertaken by auditors to institutionalize sustainability assurance, evidence of maintaining work could be found in contexts where such assurance has advanced further. To illustrate, Channuntapipat et al. (2019) identify four types of sustainability assurance engagements, which are designated as social assurance, integrated assurance, formative assurance and compliance assurance. Our empirical data can be classified as formative assurance in which the practice focuses on specific KPIs that are agreed upon between reporting organizations and assurance providers. The authors explain that this does not necessarily mean that assurance providers lack independence and provide a consultancy service instead of an assurance service, but the focus does tend to be mainly on the interests of management rather than those of external stakeholders. It would be interesting to see how sustainability assurance is created and maintained under conditions of integrated assurance and how it is influenced by institutional logics.


Development of sustainability reporting and associated assurance in Finland (PwC, 2016)

Figure 1

Development of sustainability reporting and associated assurance in Finland (PwC, 2016)

Selected results of Finnish and EU citizens' CSR perceptions (European Commission, 2013)

Aspect surveyedFinlandEU average
% of respondents interested in CSR83%79%
% of respondents who believe large firms make efforts to act responsibly57%48%
% of respondents who believe SMEs make efforts to act responsibly83%71%
Main negative effects of firms on society identified by respondents
Environmental pollution46%39%
Reducing the number of their employees58%39%
Poor working conditions/failure to respect labor standards24%35%
Excessive influence on government policy15%28%
Encouraging over consumption25%25%
Poor quality of products or services22%19%

Empirical examples of institutional work (IW) undertaken to promote or undermine sustainability assurance in Finland

Type of IW (Perkmann and Spicer, 2008)Manifestation in the study
Supporting work, key actors and logicsUndermining or rejected forms of work, key actors and logics
Political workAdvocating mandatory sustainability assurance in EU consultation concerning the directive on nonfinancial reporting
Actors: audit firms (professional and market logics); NGOs (community logic)
Undermining work: Advocating nonmandatory sustainability assurance in the EU consultation concerning the directive on nonfinancial reporting
Actors: Ministry of Employment and the Economy (market logic); business lobby groups (market logic)
Rejected forms of work: National-level advocacy
Actors: audit firms (professional and market logics); Prime Minister's office (good corporate citizen logic)
Cultural workCreating a normative network through the annual Corporate Social Responsibility Reporting Competition where more points are awarded for assured reports
Constructing identities of firms and stakeholders as principals and agents distant from each other
Constructing identities of Board members as risk-averse
Actors: audit firms (professional and market logics)
Rejected forms of work
Creation of normative networks around sustainability assurance Constructing identities of firms and investors as being distant from each other
Actors: institutional investors (good corporate citizen logic); Prime Minister's office (good corporate citizen logic)
Technical workMimicry: sustainability assurance statements similar to financial audit statements
Mimicry: inclusion of financial auditors in assurance engagements
Standardization: promoting GRI and conventional audit methods to present sustainability assurance as auditing
Actors: audit firms (professional and market logics)
Rejected forms of work
Standardization of sustainability assurance methods
Actors: audit firms (professional and market logics)

List of interviews

#Actor groupTitle of the intervieweeOrganizationDuration (min)Date
1FIRM/AUDITEESustainability ManagerFirm Alpha62Nov 2010
2FIRM/AUDITEE1) Sustainability Manager 2) Head of a Business Control 3) CFOFirm Beta104Dec 2010
3FIRM/AUDITEECommunication and Sustainability ManagerFirm Gamma144Jun 2011
4STAKEHOLDERA member of CSR competition jury, CSR researcherUniversity110Oct 2012
5ASSURORAssurance providerAuditing firm A76Nov 2012
6ASSURORAssurance providerAuditing firm B60Nov 2012
7INVESTORCEOInstitutional Investor A63Nov 2012
8INVESTORHead of Responsible InvestmentsInstitutional Investor B79Jan 2013
9FIRM/AUDITEESustainability ManagerFirm Delta49Dec 2013
10FIRM/AUDITEESustainability ManagerFirm Epsilon44Dec 2013
11ASSURORAssurance providerAuditing firm A45Feb 2014
12ASSURORAssurance providerAuditing firm B77May 2014
13REGULATORPublic OfficerMinistry105*May 2014
14INVESTORManager of Sustainable InvestmentsInstitutional investor C49May 2014
15ASSOCIATION1) Senior Adviser, Sustainable Business
2) Lawyer
Business Association A63Jun 2014
16FIRM/AUDITEECommunication and Sustainability ManagerFirm Gamma82Aug 2014
17ASSURORAssurance providerAuditing firm C47Aug 2014
18ASSURORAssurance providerAuditing firm B101Aug 2014
19ASSURORAssurance providerAuditing firm D113Apr 2015
20ASSURORAssurance providerAuditing firm B38Apr 2015
21ASSURORHead of Assurance ServicesAuditing firm E48Apr 2015
22ASSURORAssurance providerAuditing firm C31Apr 2015
23FIRM/AUDITEEDirector, Corporate ResponsibilityFirm Zeta64Jan 2016
24NGOProgramme ManagerNGO 145Jan 2016
25REGULATORSenior AdvisorMinistry58Jan 2016
26REGULATORSenior Financial CounselorPrime Minister's Office61Jan 2016
27NGOExecutive DirectorNGO 252Jan 2016
28NGOExecutive DirectorNGO 347Jan 2016
29INVESTORInvestment ManagerInstitutional Investor D70Jan 2016
30NGOSecretary GeneralNGO 448Feb 2016
31ASSURORHead of Assurance ServicesAuditing firm E58Feb 2016
32ASSOCIATIONCEOBusiness Association B61Feb 2016
33ASSURORSenior Manager, Climate Change and Sustainability ServicesAuditing firm F in Sweden61Feb 2016
34REGULATORCivil OfficialMinistry65*Mar 2016
35ASSURORSenior AdvisorConsultant Assuror58Mar 2016
36SUPERVISORFinancial Market SupervisorStock Market Supervisor90*Apr 2016
37INVESTORESG ManagerSocially responsible investors86Sep 2016
38INVESTORSenior AnalystSocially responsible investor61Sep 2016
39FIRM/AUDITEESustainability ManagerFirm Eta90Nov 2016
40FIRM/AUDITEESustainability ManagerFirm Theta44Nov 2016
In total45 h

Note(s): * notes only, not tape recorded interview

Sustainability assurance activities of auditor and consultant assurors in Finland

Auditor assuror (27) %Consultant assuror (7) %Total (34) %
Test of the accuracy and completeness of the information from original documents and systems on a sample basis27
100 %
71 %
94 %
Interviews with people responsible for collection and reporting of the information20
74 %
100 %
79 %
Management interview25
93 %
14 %
76 %
Site visit(s)19
70 %
0 %
56 %
Evaluation of adhesion to the principles and/or guidelines16
59 %
14 %
50 %
Test of the consolidation of information and performing recalculations on a sample basis16
59 %
0 %
47 %
Evaluation of reporting and data gathering systems10
37 %
71 %
44 %
Assessment of the company's defined material sustainability topics13
48 %
29 %
44 %
Comparison to the company's reporting principles13
48 %
0 %
38 %
Document review10
37 %
14 %
32 %
Evaluation of the company's sustainability procedures7
26 %
57 %
32 %
AA1000APS application4
15 %
14 %
15 %
Assessment of stakeholder inclusivity and responsiveness5
19 %
14 %
18 %
Employee interviews4
15 %
0 %
12 %
Analytical review4
15 %
0 %
12 %
Evaluation of sustainability information and calculations0
0 %
29 %
6 %
Media search2
7 %
0 %
6 %



We acknowledge that to refer to CSR reports as “sustainability” reports is problematic from a critical point of view (see, e.g. Gray, 2010); however we deem this to be an issue beyond the scope of the present study. We employ the term here only for the sake of being consistent with the established notion “sustainability assurance”.


The Johannesburg Stock Exchange requires listed companies to have their sustainability reports assured as per the recommendations of the King III Code (Ackers and Eccles, 2015). The French government also requires listed companies to publish third-party verified CSR information in the annual directors' report (KPMG, 2016). Due to the European Directive 2014/95/EU on nonfinancial and diversity information disclosure requirement, Italy requires companies under the directive to provide verified information (Jeffrey, 2017).


We are thankful to one of the anonymous reviewers for crystallizing these contributions.


There is also a sizeable literature on the oftentimes problematic outcomes of sustainability assurance. We deem this topic to be outside the scope of the present paper; interested readers are referred to Adams and Evans (2004); Ball et al. (2000); Belal (2002); Deegan et al. (2006a, b); Edgley et al. (2010); Gray (2000); Manetti and Becatti (2009); Manetti and Toccafondi (2012); O'Dwyer and Owen (2005) as well as Owen et al. (2000).


Building on Power (1997b), Malsch (2013) assumes an explicitly critical stance regarding the prominent role of the accounting industry in the field of corporate social responsibility. However, Malsch (2013) does not examine the processes through which the accounting industry has acquired a central position but focuses on the political consequences of such heavy involvement.


One of these three firms used to assure their sustainability report but discontinued the practice a few years ago.


To complement our interview data, in May 2016, we administered a focus group discussion for members of the Finnish Association of Socially Responsible Investors. The event was attended by 18 investors who discussed the usefulness of sustainability assurance information. Four of the participants have been individually interviewed during the data gathering.


The European Values Survey is administered approximately once in a decade. In May 2018, the data collection for the next round is still ongoing, so we have utilized the data from 2009.


In 2013 for instance 16 nonlisted firms signed up, of which one was an SME, eight were public sector organizations and the rest were other nonlisted firms.


About 130 companies are listed on the Helsinki Stock Exchange, while the Stockholm Stock Exchange list contains about 320 companies. Moreover, 24 Global Headquarters of the Forbes Global 2000 list are located in Sweden, while only 10 such headquarters are located in Finland (Oresunds Instituttet, 2015).



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The authors would like to thank Paul Andon, Oana Apostol, Chris Chapman, Conor Clune, Clinton Free, Matias Laine, Kari Lukka, Gary Monroe, Peeter Peda, Johanna Rämö and Prabhu Sivabalan for their detailed and insightful comments on the manuscript. Previous versions of the paper have been presented at the respective Accounting and Finance Research Seminars of Turku School of Economics, Aalto University Business School, University of Tampere, University of New South Wales and University of Technology Sydney; the 25th CSEAR Conference at St. Andrews, Scotland and the FRASOP 3 workshop at London School of Economics. The comments from the audiences of those events are also gratefully acknowledged. Eija Vinnari's work was supported by the Academy of Finland research grant (decision no. 324215). Both authors are also thankful for the research grants from the Foundation for Economic Education and Finland's Sustainable Investment Forum (Finsif).

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Eija Vinnari can be contacted at:

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