Influential global investor body sets out expectations on assurance of sustainability

Led by investors responsible for assets under management of around $77 trillion, ICGN advances the highest standards of corporate governance and investor stewardship worldwide in pursuit of long-term value creation, contributing to sustainable economies, societies, and the environment. 

Many jurisdictions are adopting mandatory requirements for companies to report sustainability information. This is something investors have been calling for, as they need high quality and comparable corporate sustainability disclosures to make informed investment, risk management, and stewardship decisions.

Yet many investors are concerned that corporate sustainability disclosures may contain some unsupported claims, sometimes referred to as “greenwashing”. To enhance trust in the quality and reliability of companies’ sustainability reporting, assurance of this information by an independent third party plays a crucial role.

ICGN’s Global Policy Director, Severine Neervoort, said:

“In the future, investors are likely to increasingly hold company boards accountable if sustainability reporting is not prepared with the same rigor and ethical approach as financial statements.

Currently, we are in a transition period, where companies and assurance providers are building capacity, global standards are being adopted and must be implemented, and market participants are developing their understanding of sustainability assurance.

Some experts anticipate a ‘wave’ of qualified opinions in the short term, and investors will need to decide how to interpret these assurance reports and engage constructively with companies.

Companies need to introduce robust governance and internal controls, and ensure that external assurance is of high quality, whoever conducts it. This is key to foster trust in corporate sustainability reporting.”

We will continue to explore this key topic in a plenary session, 'Standards for sustainability reporting and assurance', with the Chairs of the International Ethics Standards Board for Accountants (IESBA) and the International Auditing and Assurance Standards Board (IAASB), the Vice-Chair of the International Sustainability Standards Board (ISSB), and a representative of the Japan Financial Services Agency on Day Three of the ICGN 2024 Annual Conference (17 July): www.icgn.org/icgn-2024-annual-conference-london-agenda Investor Viewpoints are part of ICGN’s thought leadership work; providing opinion on emerging corporate governance issues and intended to generate debate. All our Investor Viewpoints are available at: www.icgn.org/publications