More progress needed on sustainability assurance, says GRI
New analysis has revealed the growing importance of sustainability assurance, but more progress is needed, according to Global Reporting Initiative (GRI). Analysis from the International Federation of Accountants (IFAC) found that assurance on some sustainability disclosures is now provided by 69% of companies (a 5% rise on 2021) yet the overall scope remains limited.
Global Reporting Initiative (GRI) said it is a welcome step towards more robust and reliable data, but added that an uneven global picture underlines why it is calling for mandatory assurance of sustainability reporting to become normal practice. The GRI Standards are the most widely used sustainability reporting standards by businesses, with an adoption rate of 77% (up from 74% in 2021),
The IFAC analysis, The State of Play: Sustainability Disclosure and Assurance 2019-2022, involved over 1,400 companies from 22 countries. It found that information disclosed using the GRI Standards is subject to assurance more often than that of any other reporting framework – with a 40% assurance rate. It also revealed that 98% of companies produce an annual sustainability report and 87% use a mix of frameworks, highlighting the need for globally accepted and mandatory requirements, said GRI.
Eelco van der Enden, CEO of GRI, said: “This valuable IFAC research underlines the growing importance of sustainability assurance. While I’m pleased that reporting with the GRI Standards is the most frequently used and assured, it is clear that more progress is needed. Unsubstantiated claims can be deeply damaging for companies and investors, which is why auditing of sustainability disclosure needs to become standard practice, just as it is for financial data.”
He added: “GRI continues to call for mandatory assurance as a key driver for businesses to build trust with their stakeholders, prove their sustainability credentials and tackle head-on any suggestions of greenwashing. We also support the IAASB’s work to create an overarching sustainability assurance standard, which, as the patchy global picture in this report illustrates, is much needed.”
The International Auditing and Assurance Standards Board is currently developing a standard for sustainability assurance (ISSA-5000), to which GRI has provided technical input.
