More progress still needed on sustainability assurance
IFAC research finds the GRI Standards remain the most frequently used and assured
New analysis has revealed two-in-three large companies obtain assurance on at least some of their sustainability disclosures. While a welcome step towards more robust and reliable data, an uneven global picture underlines why GRI is calling for mandatory assurance of sustainability reporting to become normal practice.
The State of Play: Sustainability Disclosure and Assurance 2019-2022, published by the International Federation of Accountants (IFAC) on 22 February, involved over 1,400 companies from 22 countries. The IFAC findings include:
Assurance on some sustainability disclosures is now provided by 69% of companies (a 5% rise on 2021) yet the overall scope remains limited.Information disclosed using the GRI Standards is subject to assurance more often than that of any other reporting framework – with a 40% assurance rate.The GRI Standards are the most widely used sustainability reporting standards by businesses – with an adoption rate of 77% (up from 74% in 2021).98% of companies produce an annual sustainability report and 87% using a mix of frameworks, highlighting the need for globally-accepted and mandatory requirements.
This valuable IFAC research underlines the growing importance of sustainability assurance. While I’m pleased that reporting with the GRI Standards is the most frequently used and assured, it is clear that more progress is needed. Unsubstantiated claims can be deeply damaging for companies and investors, which is why auditing of sustainability disclosure needs to become standard practice, just as it is for financial data. GRI continues to call for mandatory assurance as a key driver for businesses to build trust with their stakeholders, prove their sustainability credentials and tackle head-on any suggestions of greenwashing. We also support the IAASB’s work to create an overarching sustainability assurance standard which, as the patchy global picture in this report illustrates, is much needed.
Eelco van der Enden, CEO of GRI
The International Auditing and Assurance Standards Board (IAASB) is currently developing a standard for sustainability assurance (ISSA-5000), to which GRI has provided technical input.
On 27 February, GRI signed a Memorandum of Understanding with Allen & Gledhill LLP to deliver capacity building for the legal profession on sustainability-related risk management competencies. Initially focused on the Asian region, this collaboration is supported under the Sustainability Innovation Lab.
The GRI Perspective issue Auditing to save the planet: The battle against greenwashing (November 2022) explored trends towards mandatory assurance in sustainability reporting.