ISOS Group
The next generation of sustainability professionals

Blog

Third-Party Assurance: How It Works

Originally posted December 18, 2018

As sustainability reports and non-financial disclosures get more scrutiny and use from boards of directors and investors, the information contained in them needs to be accurate, complete and credible. Getting your sustainability report assured by a third party can help to achieve all three. It also can help your organization save money, as discussed my previous post, and provides many intangible benefits like peace of mind for report creators.

Where to start?

Deciding on the scope of assurance is a good first step. An entire sustainability report can be assured or verified for its conformance to specific reporting frameworks. For example, if a company claims that its report is presented in accordance with a specific level (i.e., Core or Comprehensive) of the GRI Sustainability Reporting Standards, it can have a third party attest to the report’s adherence to the standards. An example of this type of assurance engagement can be found in the International Flavors & Fragrances 2015 Sustainability Report.* (Disclosure: ISOS Group client)

In addition, organizations can have the data  in their responses to questionnaires from the Dow Jones Sustainability IndexCDP (e.g., climate changewatersupply chain) and the Global Real Estate Sustainability Benchmark (GRESB) verified to ensure that they are providing accurate information. In cases where responses are rated, external verification of the data increases the scoring potential.

If your organization is not ready to have its entire sustainability report verified, you can pursue verification of specific metrics. Verification of greenhouse gas (GHG) emissions information typically involves an independent quality assurance that evaluates the accuracy and completeness of the data. Included in this evaluation is the reliability of the procedures and controls established to manage the data along with compliance with specific reporting frameworks. An example of GHG verification can be found in the Baxter 2016 Corporate Responsibility Report.*

Social metrics, such as ones related to labor and human rights practices, can be reviewed with respect to their adherence to SA8000, a framework that assists certified organizations provide evidence of their efforts in treating workers fairly. An example of this assurance can be found in the Simple Green 2014 Sustainability Report* and the 3M 2014 Sustainability Report.*.

Who conducts assurances?

You have choices in selecting an assurance provider. The major players are accounting firms, engineering specialists and sustainability consulting firms. CPA Journal found that, “there are currently 29 different assurance providers signing their names on the assurance statements of the sustainability reports of S&P 500 companies; however, more than half of these assurance statements are concentrated among four companies.” ISOS Group, a specialist in sustainability reporting, report frameworks and verification, offers a variety of assurance services.

What standards are available?

In 2017, the AICPA issued Attestation Engagements on Sustainability Information (Including Greenhouse Gas Emissions Information). This document provides interpretive guidance for examination and review engagements on sustainability information. They contain updated guidance for attestation engagements on GHG emissions information and expanded guidance on the use of specialists and other practitioners.

The AA1000 Series is a framework that includes the AA1000 Assurance Standards. These standards provide requirements for conducting sustainability assurance by evaluating an organization’s report for its adherence to the AA1000 AccountAbility Principles and the quality of the disclosed information on sustainability performance.

CDP has criteria for third-party verification for data submitted on its questionnaires. These include relevance, competency, independence, terminology, methodology and availability. CDP also provides a list of verification standards that it will accept.

ISOS Group utilizes any or all of these standards, where appropriate.

What are the next steps for your organization?

Now that you know more about sustainability assurance, you may want to take the next step to get assured.

ISOS Group offers a number of External Assurance services, including:

  • External assurance of GRI sustainability reports

  • External verification or assurance of data submitted through the CDP Questionnaires: Climate Change, Water and Supply Chain

  • External verification or assurance of public disclosures submitted through the Global Real Estate Sustainability Benchmark (GRESB)

  • External verification or assurance of public disclosures submitted through the Dow Jones Sustainability Index (DJSI) Investor Questionnaire

Contact ISOS Group at 1-619-832-1282 or info@isosgroup.com for further information.

* The reports highlighted are ones on which ISOS Group performed assurance services.