Taxation as a Strategy for Circular Economy through Sustainability Reporting: The Agency Theory Perspective

Greenhouse gas emissions and energy usage have grown because of increasing awareness of sustainability reporting, more concerns about climate change, and new laws and levies. Audit committees, management, internal auditors, external auditors, and other stakeholders may all have a role in sustainability reporting. This article examines the potential impact of agency cost (AC) from a tax perspective on sustainability reporting (SR) in a global context. This study uses data from 693 companies from 54 countries. This study uses its model to estimate the interaction of AC and GRI to assess SR. The results show that the lowest tax rate is in the countries of the Middle East and Africa. Egypt, Iraq, Jordan, Estonia, Tanzania, and Burkina Faso recorded the lowest disclosure rate. These results reflect that taxes describe the reporting of sustainability information. This study provides a new perspective on AC; Also, the results add to our understanding of other predictors of SR quality that demonstrate more explicit approaches to predicting its efficiency. Finally, the article presents some conclusions, as well as more research possibilities. Our findings point to the need for effective monitoring. According to agency theory, there is no single explanation that thoroughly explains our results.