Sustainability Performance and Assurance: Influence on Reputation Anna Alon School of Business and Law, University of Agder, Kristiansand, Norway Martina Vidovic Department of Economics, Rollins College, Winter Park, FL, USA ABSTRACT The positive impact of sustainability on reputation has been assumed but not sufficiently examined. This study probes the veracity of these claims by applying legitimacy and signaling perspectives to examine whether sustainability performance and assurance contribute to corporate reputation. We find superior sustainability performance has a posi- tive association with sustainability reputation. Companies with better performance are also more likely to obtain external assurance of their sustain- ability disclosure, but assurance does not directly affect reputation. Assurance appears to be a man- agerial tool associated with the congruence of inter- nal processes rather than a differentiating signal to external stakeholders. Corporate Reputation Review (2015) 18, 337–352. doi:10.1057/crr.2015.17 KEYWORDS: assurance; legitimacy; signaling theory; sustainability reporting; sustainability reputation INTRODUCTION Sustainability has become an important issue for businesses worldwide. The definition of sustainability has evolved over the past dec- ade and now tends to include social, environmental, governance and economic components (eg, Epstein and Roy, 2003; Pfeffer, 2010; Salzmann et al., 2005). This more comprehensive view incorporates the impact of organizations on the physical and the social environment and acknowledges their influence on natural and human resources (Pfeffer, 2010). In a 2011 survey of 4,000 managers in 113 countries by the MIT Sloan Management Review and the Boston Consulting Group, 67 percent claimed that sustainability is ‘key to competitive success’ (Economist, 2012: 76). According to Lubin and Esty (2010), sustainability is a megatrend that ‘will touch every function, every busi- ness line, every employee’ (9). It influences product innovation (Nidumolu et al., 2009), strategic planning (Epstein and Roy, 2003) and marketing strategies (Sheth et al., 2011). In addition, how sustainability-focused activities relate to strategic outcomes, speci- fically reputation, is of interest (Johnson et al., 2003; Searcy, 2012). Some believe that sustainability efforts can enhance corporate reputation. Forty-one percent of the senior executives interviewed for KPMG’s (2011) global survey cited the desire to enhance reputation as a main driver behind sustainability efforts. Accord- ing to Fombrun’s (1996: 37) widely cited Corporate Reputation Review, Vol. 18, No. 4, pp. 337–352 © 2015 Macmillan Publishers Ltd., 1363-3589 Corporate Reputation Review Volume 18 Number 4 www.palgrave-journals.com/crr/