Bundling of financial audit and sustainability assurance under CSRD: identifying the practice and interpreting the resulting market structure

Purpose This study aims to document and theoretically interpret the near-universal practice of appointing the incumbent financial auditor(s) to also provide mandatory assurance for sustainability reports under the European Union Corporate Sustainability Reporting Directive (CSRD). Design/methodology/approach Based on observations from a sample of 268 EURO STOXX 600 companies, this research documents the frequency of alignment between financial and sustainability assurance providers. The central observed pattern is analyzed using established theoretical frameworks. Findings The study reveals near-universal alignment (263 out of 268 firms), where firms bundle CSRD sustainability assurance with their incumbent financial auditor(s). Furthermore, analysis shows engagements involving Big 4 firms accounted for 97% of companies, indicating extreme market concentration. This alignment suggests efficiency and institutional drivers. No accredited Independent Assurance Service Providers (IASPs) were identified. Practical implications The findings inform stakeholders about extreme market concentration and the current lack of provider alternatives, with implications for assurance quality, provider choice and independence. Regulators, standard-setters and companies need this evidence to develop a more competitive assurance market aligned with CSRD’s objectives. Social implications Credible, independent assurance enables capital to flow toward activities that drive genuine sustainable development, funding the physical, technological and social transitions required for progress on goals such as climate action, clean energy and responsible consumption. Originality/value Providing baseline documentation of CSRD assurance market structure, this research applies theoretical lenses to interpret this extreme market convergence and service consolidation under incumbents.