3.4.3.2 Assurance

Third-party assurance of sustainability reports is voluntary in the US.1 It is still far from reaching the level of financial auditing in the US. Although the number of sustainability reports is growing, assurance of these reports is not keeping up the pace. However, the trend seem to be the continuous growth of both sustainability reports and third party assurance of the information disclosed in the reports.2 In the US the most common type level of assurance provided is the limited assurance of sustainability reports, where the third party explains that nothing came to its attention to suggest that, in all material respects, the information provided by the reporting organization have been misstated, in accordance with the criteria.3 Further development and uptake of assurance of the information disclosed in sustainability reports would increase trust in the information disclosed, improve data quality and help companies reduce risks associated with data inaccuracies.4 In 2002 the American Institute of Certified Public Accountants (AICPA) and the Canadian Institute of Chartered Accountants (CICA) formed a joint task force on sustainability reporting. Together they developed the first attestation engagement on environmental reporting in the US, issuing the Statement of Position 03-2, Attest Engagements on Greenhouse Gas Emissions Information, approved by the American Institute of Certified Public Accountants Auditing Standards Board.5 The American Institute of Certified Public Accountants has developed the AT 101 assurance standard, adopted by the Public Company Accounting Oversight Board (PCAOB) as AT Section 101, which although not initially developed for the assurance of sustainability reports, it has been used in third-party assurance of sustainability reports in the US.6 Currently, the American Institute of Certified Public Accountants has established a Sustainability Assurance and Advisory Task Force to develop a sustainability assurance standard in 2016.7

In 2011, the Global Reporting Initiative reported that in the US only 10% (26 out of 269) of Global Reporting Initiative -based sustainability reports obtained external assurance, against 38% globally.8 Also in 2011, KPMG ranked the US in 32nd out of 34 countries included in their International Survey of Corporate Responsibility Reporting (2011), registering only 13% of US companies with assured reports.9 Within the 30 assurance statements in KPMG’s sample, 16 had limited assurance, 3 had reasonable assurance (e.g. UPS and Starbucks Coffee) and 11 did not mention any type of assurance.10 In 2013, Global Reporting Initiative found that only 30% of assured Global Reporting Initiative reports published by US companies were extended to the full report. Other reports registered different levels of assurance, for instance restricted specific sections.11 As for the S&P Global 1200 companies, in 2014 30% had seek third party assurance compared to 25% in 2013. In the S&P 500, in 2014 12% of the companies’ reports had third party assurance compared to only 8% in 2013.12 In 2014, the Centre for Sustainability and Excellence (CSE)’s report on sustainability trends in North America, reported that the percentage of companies in North America seeking external assurance remained lower than the global average, which raised questions about the level of transparency and credibility of the data disclosed.13

Between 2015 and 2017 KPMG reported a 12% increase in assurance in the US.14 KPMG suggested that the assurance rate increase was linked to a having a high rate of corporate reporting.15 In 2018, Sustainable Investments Institute (Si2) found that among the US S&P 500, a total of 395 companies (78%) issue sustainability reports.16 From these sustainability reports, only 36% were externally assured, from which 90% of the external assurance applies ony to specific date, such as greenhouse gas emissions.17 Only 3% of the reporters had their environmental and social data performance completely externally verified.18