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Purpose This study aims to examine the correlation between sustainability controversies and external sustainability audits, placing specific emphasis on evaluating how the presence of sustainability/CSR committees moderates this connection in firms with both high and low emissions. Design/methodology/approach Using a thorough quantitative approach, this study analyses a data set comprising 1,726 firm-observations from Europe, covering the years 2006–2021. The primary econometric model used is ordinary least squares, complemented by robustness tests including random effects regressions, a two-step generalized method of moments approach, sub-analysis and Propensity Score Matching. Findings This study reveals a significant role for sustainability external audits in alleviating ESG controversies, particularly within less-polluting firms. Also, it uncovers that the existence of a sustainability/CSR committee significantly moderates the relationship between ESG controversies and external sustainability assurance. Practical implications This study has crucial implications for organizations seeking to improve sustainability practices and build stakeholder trust. Insights into the relationship between ESG controversies, sustainability audits and the role of sustainability/CSR committees provide practical guidance for enhancing sustainability performance. This information is valuable for managers, regulators and stakeholders in shaping decisions and policies for a more sustainable corporate landscape. Originality/value This study provides fresh insights into how companies manage environmental challenges and enhance their reputation through external assurance. The integration of institutional theory enriches the theoretical framework, revealing external influences on companies’ decisions. This study’s focus on sustainability/CSR committee contributes to understanding organizational responses to environmental challenges, advancing knowledge in sustainability and corporate governance.
Ayman Issa (Wed,) studied this question.