Assurance and Accountability in Circular Economy Transitions for Sustainable Development

Abstract

ABSTRACT This study examines how disclosed circular implementation, reported circular accountability and circular‐specific assurance coverage are associated with sustainable development. Drawing on accountability theory, it distinguishes circular economy transition (CET), circular economy accountability (CEA) and circular economy assurance (CEAU) as analytically distinct disclosure‐based constructs. Using 79,260 firm‐year observations from 13,211 listed firms during 2020–2025, panel regressions with industry, year and country fixed effects show that greater disclosed circular implementation and circular‐specific assurance coverage are positively associated with reported circular accountability. The CET–CEA association is also stronger at higher levels of CEAU, a pattern consistent with an accountability demand–difficulty mechanism in which verification becomes more consequential as circular implementation creates dispersed evidential requirements. Results remain broadly consistent across lagged, alternative‐measurement and continental analyses. CET, CEA and CEAU are also positively associated with the retained broad sustainable‐development performance (SDP) composite, while the CET–SDP association is stronger at higher levels of reported accountability and assurance coverage. These findings are between‐firm conditional associations rather than causal or within‐firm effects. The study conceptualises circular‐specific assurance as boundary‐spanning verification infrastructure.