4 External Assurance Trends in Sustainability Reports

By: Alexandra Kueller

After noticing a growing trend with sustainability reports, GRI North America recently published a report discussing that trend: the increase of external assurance of sustainability reports. Analyzing reports published in the GRI Database from 2011-2013 and conducting interviews with 11 US companies, GRI was able pinpoint the noticeable trends in external assurance engagement.

Below are the main trends found by GRI:

1. External assurance is growing across the board

  • In the United States, the amount of externally assured reports has increased from 10% in 2011 to 16% in 2013. While this number might seem small (especially when looking at the numbers for worldwide companies), the numbers of reports that are externally assured in the US has tripled from 2008 (from 11 to 41 in 2013).
  • For worldwide companies, the number of externally assured reports has seen a 7 percent increase from 2011 to 2013, jumping from 38% to 45%.

2. Publicly traded companies hold the majority of externally assured reports

  • Out of all the US companies that externally assured, 89% are publicly listed companies, whereas only 57% of the externally assured worldwide companies are publicly listed.

3. Some companies are obtaining multiple assurance statements

  • One of the biggest trends GRI has noticed in the US is the increase of obtaining multiple assurance statements. In 2011, 26 companies published reports that were externally assured, but there were actually 30 external assurance statements. The same trend happened in 2013 with 41 companies publishing externally assured reports, but with 44 external assurance statements.

4. More companies are having their entire report externally assured

  • Since 2011, there has been an increase in US companies to have their entire sustainability report externally assured. That number has increased from 17% in 2011 (5 of 30 externally assured reports) to 30% in 2013 (13 of 44).

Want to learn about GRI guidelines and other types of sustainability reports? Learn more about the subject in our white paper.

The Best Sustainability Reporting Tips from Around the Internet

Since it's the season for publishing sustainability reports, we thought this 2012 blog post would come in handy again. Here are some tips, mistakes, and misconceptions about sustainability reporting from a wide variety of resources.. We've compiled the best of those lists right here for easy reference. Enjoy!

 

From Greenbiz, Are Companies Missing Out on a Sustainability Goldmine? (tips for mining that "gold")

  1. Keep your company's mission and strategy at the top of mind. 
  2. Find points of intersection: Which factors might impact your financials significantly in the short term or long term?
  3. Consider the ripple effect throughout your company's supply chain.
  4. Ponder which international standards or agreements might hold sway.
  5. Pay attention to what outside expert communities are telling you.
  6. Ask this question: Is there a social impact?

From BSR, Top Five Reporting Mistakes (an unofficial list) 

  1. Starting too late
  2. Following an ad hoc signoff process
  3. Using the tactical over the strategic
  4. Failing to connect the quantitative indicators and qualitative narrative
  5. Focusing on internal audiences at the expense of external readers

From Sustainable Business Forum, 7 Material Issues for the GRI to Consider

  1. The impact of sustainability reporting - how many companies report?
  2. The outcome of sustainability reporting - does it make a difference?
  3. The quality of sustainability reporting
  4. Use of the Application Levels
  5. The role of assurance
  6. The GRI relationships with financial services stakeholders
  7. The GRI's management of its operations in a social and environmentally responsible manner

From AccountAbility, Top Five Misconceptions About GRI Reporting

  1. A GRI “A” level means leadership.
    A GRI “plus” (+) signifies a rigorous assurance process
  2. Reporting on as many indicators as possible is the main goal of GRI reporting
  3. GRI presents a full framework for sustainability communications
  4. GRI is the best tool for measuring impact

From Sustainable Business Forum, Selling a CSR Report: How to Craft the Perfect Pitch

  1. Pitch it as a Starting Point
  2. Pitch it as a Learning Exercise
  3. Pitch it as an Engagement Tool
  4. Pitch it as a Competitive Edge
  5. Pitch it is a Celebratory Exercise

And don’t forget that Strategic Sustainability Consulting offers a wealth of information on topics just like this through our website resources.

The IIRC Framework Is Open for Consultation -- What Impact Will It Have?

If you are a company that already publishes a sustainability report (or is thinking about doing it in the future), stop what you're doing and pay attention. 

For the last 15 years, most sustainability reporting has been driven by the Global Reporting Initiative (GRI ), which publishes a stakeholder-driven set of sustainability reporting guidelines designed to give companies a framework for disclosing their economic, social, and environmental impacts.

While GRI is an essential part of the sustainability reporting field, a new player has appeared who may shake things up: the International Integrated Reporting Council (IIRC). The IRRC is a group designed to promote "integrate reporting" -- which is integrating sustainability and financial reporting into a single, more meaningful model.

Why is this important now?

The IIRC has launched the consulting draft of integrated reporting framework. Over the next ninety days, the organization is seeking feedback on the draft from companies, investor groups, reporting standards organizations, accounting bodies and regulators — basically everyone who has a stake in the transformation of corporate reporting.

The framework differs from standard financial reporting in a number of ways:

(For more information on the topic, check out the IIRC executive director's article in the Harvard Business Review).

Even if you aren't a publicly-traded organization and don’t have equity investors, this is still important. The IIRC framework has the potential to change the types of questions that stakeholder will ask -- including customers, suppliers, financiers, and local advocates. 

So check out the draft framework and make your voice heard. (At least take a look -- you'll want to know what's coming down the pipeline regardless of your level of commitment at this time!)