Close to three quarters (73%) of large businesses across the G20 nations sought assurance on at least some aspect of their sustainability disclosures in 2023, a new report by the International Federation of Accountants (IFAC) and AICPA & CIMA has found.
This is up from 69% the previous year, and just 51% in 2019, the groups noted, indicating that more global firms are seeking assurance on their sustainability reporting.
As the study noted, almost all large companies (98%) engage in some degree of sustainability reporting, with greenhouse gas emissions remaining the most widely assured category of sustainability information.
The role of audit firms
Audit firms continue to lead the way in terms of providing assurance on sustainability disclosures, accounting for 55% share. This percentage fell from 58% in 2022, however there are mitigating factors at play, including the consolidation of reports in the EU, where firms now issue fewer but broader assurance reports.
Other markets have seen an increase in the use of audit firms for sustainability assurance, with Singapore seeing a six-percentage-point increase in their usage, and gains also recorded in South Africa (+4pp), the United Kingdom (+5pp) and United States (+5pp).
“Auditors have extensive education requirements, adhere to strict independence rules and possess a deep and holistic view of an organisation’s business, processes and risk profile,” commented Susan Coffey, CPA, CGMA, the CEO of public accounting for AICPA & CIMA.
“That makes them ideal candidates to perform sustainability assurance engagements, and we’re seeing many boards and audit committees endorsing that view as corporate reporting matures.”
Annual reports
Some 44% of global firms now embed sustainability information into their annual reports, up from 18% five years ago, the report noted.
“The largest global companies have responded well to voluntary systems of sustainability reporting and assurance, driven by investor demand,” added IFAC chief executive Lee White. Read more here.
