1.2.2 The Assurance Standards

In parallel to the financial audits, a specialized type of assurance has been developing: the assurance of sustainability information. Through the service of assurance, accountants verify and certify the information provided in a sustainability report against sustainability standards, as the GRI, the CDP, the Greenhouse Gases (GHG) Protocol or the AA1000, but also for regulatory compliance, for example, with the EU Non-Financial Reporting Directive or the EU Emissions Trading System. Different organizations define sustainability assurance. Among others, GRI (Carrots and Sticks 2010 report) defines it as “an important means to enhance the credibility of sustainability reports”; KPMG defines assurance as the term “used to describe formal statements issued by independent professional assurance providers, including accounting, certification, and technical firms (…) to draw conclusions on the quality of the report and its data (…). The Association of Chartered certified Accountants and AccountAbility define it as “an evaluation method that uses a specified set of principles and standards to assess the quality of an organisation’s subject matter and the underlying systems, processes and competencies that underpin its performance.”1 The assurance of non-financial information is meant to reduce the risks of data inaccuracy (GRI, 2012).2

According to the 2010 GRI Carrots and Sticks report, Australia, China, France, Germany, Japan, the Netherlands, Spain and Sweden3 had already some kind of sustainability assurance standards specially developed nationally for each country. However, in 2018 there is still no globally accepted sustainability reporting assurance standard.

Assurance is mostly provided by the largest accountancy organizations. In 2008, 70% of the G250 companies had hired an accountancy organization as an assurance provider (KPMG, Survey 2008). In 2017, KPMG reported that third party assurance is a standard practice among the largest companies in the world (G250). Among the G250 companies, around 67% seek assurance of their sustainability reports. Comparing with the information provided by KPMG’s 2015 survey, we see a slight growth from 2015, when 63% of the G250 had their reports assured.4 In 2017, in the N100 only 45% of the companies has seeked assurance of their sustainability reports. The numbers were higher in 2015, when around 64% of the N100’ companies had required assurance services.5 KPMG refered in 2017, that their data suggested that the rate of the assurance services was higher in countries where high rates of sustainability reporting was achieved, pointing to the case of the US, as an example.6

The GRI has previously included in their G3 guidelines (their third set of guidelines issued in late 2006) a set of key qualities for external assurance of reports using the GRI Reporting Guidelines. Among others, the following:

The drivers for sustainability reporting assurance differ. In some countries, like the Scandinavian the main driver is legislation and in others only reputation and marketing to boost the quality of their report, credibility and their market competition. Assured reports bring trust and credibility to the data disclosed. Investors and other users of the reports will be certain about the reliability and accuracy of the information they are using (KPMG, Survey 2008).

Sections 2.1 and 2.2 below, explain the two most used assurance standards worldwide.