Understanding Environmental, Social and Governance Reporting and Assurance Expectations Gap

Abstract

Expectation gap has been an issue in the accountancy profession for a long time and several studies have been done in attempting to close the gap. However, studies on expectations gap in environmental, social, and governance (ESG) reporting and assurance has been underexplored. This research explores the expectations gap existing in ESG reporting and assurance, based on insights from the context of a developing country. The study adopts the qualitative research approach where data was collected using semi-structured interviews. The purposive sampling technique was used to sample ESG report providers (the manufacturing companies listed on the Ghana Stock Exchange (GSE)), assurance providers (the auditing firms of these manufacturing companies), and users of the reports (the regulators of the report and assurance providers as well as civil society organizations that are concerned with ESG related issues). The findings reveal that the ESG reporting and assurance expectations gap exists in the developing country. The gaps identified were the knowledge gap, performance gap, evolution gap. These gaps exist primarily because the ESG reporting and assurance landscape is in the budding stage in the developing country context. The study provides insights that the report and assurance providers can draw from in designing capacity-building programmes and trainings. The findings also provide implications for governments, regulatory bodies, and standard setters to consider in formulating policies, developing regulations, and adopting standards for effective ESG reporting and assurance.