Demand for sustainability assurance is growing

By Ken Tysiac

The demand for sustainability assurance is likely to grow in the coming years, according to a new survey conducted by The Conference Board.

Thirty-seven of the 57 large U.S. and European companies participating in the survey said they obtain assurance on at least some of their publicly reported sustainability information. Seventy percent of the companies that obtain this assurance said they expect that the need for sustainability assurance will increase over the next five years.

In addition, four respondents said they plan to begin obtaining assurance on their sustainability information within the next three years, and 10 more respondents said they will consider obtaining assurance during that time frame. Twelve respondents who already obtain assurance said they plan to expand the scope of sustainability information subject to assurance.

More than three-fourths (77%) of the respondents to the survey were from U.S. companies.

Thomas Singer, a principal researcher in the ESG Center at The Conference Board, said the survey grew out of results of a previous analysis that showed rapid growth in the percentage of public companies that are seeking external assurance on their sustainability information.

Those results caused The Conference Board to take a deeper look at how companies are engaging with the practice of sustainability assurance.

"From the results of the survey, we also see confirmation that this is likely to become even more of a common practice for companies," Singer said during a telephone interview. "… That's confirmation that assurance is here to stay and will be on the radar for most companies going forward."

The survey also uncovered important information about sustainability assurance:

  • What is assured? Eleven of the 37 companies that obtain assurance do so for their full sustainability reports. The most common items that companies obtain assurance on are greenhouse gas emissions (34 companies); energy and water data; and health, safety, and diversity information.
  • Level of assurance. More than half (21 of 37) of the companies obtain "limited assurance" for their sustainability information, as would be obtained during a review engagement. Ten companies receive "reasonable assurance," as would be received in an examination engagement. Five companies receive reasonable assurance on some information and limited assurance on other information, and one respondent was not sure what level of assurance their company receives.
  • Who provides assurance? Just more than half (19) of the 37 companies that obtain assurance said accounting firms provide assurance for their sustainability report; all of those were Big Four firms. However, this percentage may not be representative of the actual percentage of assurance services provided by CPA firms because CPA firms helped distribute the survey. Six of the respondents said certification services firm Bureau Veritas was their assurance provider. Environmental consulting firms also commonly provide assurance.
  • Standards used. The standards most commonly used in sustainability assurance engagements performed for these companies are the AICPA Statements on Standards for Attestation Engagements and International Standard on Assurance Engagements (ISAE) 3000 or 3410. The AICPA standards were most common for U.S. respondents given that U.S. CPA firms are required to use the AICPA attestation standards to provide assurance services. The ISAE standards were most common among European companies.
  • Benefits and challenges of assurance. Nearly three-fourths (73%) of the 37 respondents said the most significant benefit a company derives from assuring its sustainability information is gaining credibility and trust with stakeholders. The biggest challenge of undertaking assurance is mustering the internal resources required in terms of competency and time. "That's having the right people in place to conduct and manage the process, and also the time it actually requires," Singer said. Data quality and data collection also are significant challenges for companies in obtaining assurance.

The survey also shows the interest investors have displayed in sustainability. Eight in 10 of the companies engage with investors regarding sustainability topics, and 89% of respondents said there would be implications for them if they were to stop obtaining assurance of their sustainability information.

Sustainability information also is being disclosed in annual reports, 10-Ks, and other regulatory filings in addition to sustainability reports or company websites, according to the survey.

Ken Tysiac ( is the JofA's editorial director.

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