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The impact of legitimacy threaton the choice of external carbon assurance: Evidence from the US

Ragini Rina Datt (School of Business, Western Sydney University, Parramatta, Australia)
Le Luo (School of Business, University of Newcastle, Sydney, Australia)
Qingliang Tang (School of Business, Western Sydney University, Parramatta, Australia)

Accounting Research Journal

ISSN: 1030-9616

Article publication date: 1 July 2019




The purpose of this study is to examine the impact of legitimacy threats on corporate incentive to obtain external carbon assurance.


The sample consists of the largest US companies that disclosed carbon emissions to CDP (formerly the Carbon Disclosure Project) over the period 2010-2013. Based on legitimacy theory, firms are more likely to obtain carbon assurance when they are under greater legitimacy threat. Carbon assurance is measured using CDP data. Three proxies are identified to measure legitimacy threat related to climate change: carbon emissions intensity, firm size and leverage.


This paper finds that firms with higher levels of emissions are more likely to obtain independent assurance, and large firms show the same tendency, as they are probably under pressure from their large group of stakeholders. In sum, the findings suggest that firms with higher carbon emissions face greater threats to their legitimacy, and the adoption of carbon assurance can mitigate risks to legitimacy with enhanced credibility of carbon disclosure in stakeholders’ decision-making.

Research limitations/implications

The study has some limitations. The authors have relied on CDP reports for analysis and focus on the largest companies in the US. Caution should be exercised when generalising the results to smaller firms, other countries or voluntary carbon assurance information disclosed in other communications channels.

Practical implications

This study provides extra insights into and an improved understanding of determinants and motivation of carbon assurance, which should be useful for policymakers to develop policies and initiatives for carbon assurance. The collective results should be useful for practicing accountants and accounting firms.


The paper investigates how legitimacy threats affect firms’ choice of external carbon assurance in the context of US, which has not been documented previously. It contributes to the understanding of legitimacy theory in the context of voluntary carbon assurance.



Datt, R.R., Luo, L. and Tang, Q. (2019), "The impact of legitimacy threaton the choice of external carbon assurance: Evidence from the US", Accounting Research Journal, Vol. 32 No. 2, pp. 181-202.



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Copyright © 2019, Emerald Publishing Limited

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