The aim of this study is to examine the role of independent third-party environment, social, and governance (ESG) assurance in signalling higher ESG performance. While testing the hypothesis, a liner regression is applied using data from Thomson Reuters ESG scores and global reporting initiative database from a sample of 645 unique European firms over the period of 2012-2017. Firms with third-party assurance are found to have a significantly higher ESG performance than firms with no assurance. This study offers new evidence on the signalling value of an independent third party ESG assurance in differentiating ESG performances and confirms the incentive that high performing firms could use to separate from their counterparts with poor performance in a separating equilibrium. Copyright © 2022 Inderscience Enterprises Ltd.