Global Sustainability Assurance Practices Lack Standardization

Global practices for sustainability reporting and assurance over that information — including the prevalence of assurance, level of assurance and standard and practitioner used — varies widely by jurisdiction, according to a new study from the International Federation of Accountants, the Association of International Certified Professional Accountants and the Chartered Institute of Management Accountants.

The new study is a review that provides a global picture of the current status of sustainability reporting and related assurance. The study further contextualizes this analysis with data on how and where sustainability-related information is reported and how this relates to assurance practices.

As the drive toward a global system for sustainability-related reporting continues, investors, regulators and policymakers are turning their attention to the important role of assurance in promoting high-quality reporting. With the growing importance of — and reliance on — sustainability information, low-quality assurance is an emerging investor protection and financial stability risk.

“The global community needs to consider many complex questions — should reporting sustainability information be required? If so, should assurance be required and by whom? With this new data in hand, IFAC is initiating evidence-based conversations with our member organizations and other global stakeholders to advance the global debate and help plot the way forward in the public interest,” Kevin Dancy, CEO of the International Federation of Accountants, said. “We will continue our commitment to this space as the reporting and assurance landscape evolves.”

“Companies that publish sustainability information that is subject to assurance by professional accountants have an opportunity to bring trust and reliability to their sustainability information. Engaging a licensed professional accountant who possesses the right combination of professional skills, qualifications, experience and is subject to independence, ethical and monitoring requirements, can result in truly meaningful assurance and transparency,” Susan S. Coffey, CPA, CGMA, CEO of public accounting for the Association of International Certified Professional Accountants, said. “As it stands, only around half of the companies reviewed in this study publish sustainability information that is subject to any assurance.”

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