Hot topic: assurance for corporate sustainability data in the UK
As the corporate sustainability landscape changes, assurance is becoming increasingly important. Stakeholders desire the confidence it provides, and sustainability professionals appreciate its standards-based approach. But why is this shift towards assurance happening? What exactly is assurance? How does it differ from verification, and why is it becoming so vital?
In a recent podcast, Verco experts Tilly Shaw, Jing Wang and Mark Challis delved into those questions and offered specialist advice. You can find a summary of their discussion below.
What is assurance in the context of sustainability?
In this context, assurance refers to the independent evaluation of a company’s environmental, social, and governance (ESG) data. It’s not just about verifying numbers, it’s about assessing the robustness of an organisation’s methodologies, systems and internal controls. Assurance goes beyond verification by offering a formal opinion on the reliability and completeness of the information.
Why does assurance matter?
The demand for assurance is growing rapidly because it builds trust among investors, regulators and consumers. It does this by ensuring sustainability claims are fair, clear, and not misleading. It demonstrates that a company is transparent, risk-ready and responsible; which typically increases access to capital or credit, as well as unlocking new consumer markets.
How does this apply to the UK and Europe?
In the UK, while the Task Force on Climate-related Financial Disclosures (TCFD) doesn’t mandate assurance, its emphasis on transparency is pushing companies in that direction.
It's worth noting that since the podcast the UK has published the exposure drafts of its own Sustainability Reporting Standards (UK SRS), based on the IFRS Sustainability Disclosure Standards: IFRS S1&S2. The government has also published a consultation on developing an oversight regime for assurance of sustainability-related financial disclosures. These initiatives are to establish a robust and credible system for building trust and transparency in sustainability disclosure in the UK.
Across the Channel in Europe, the Corporate Sustainability Reporting Directive (CSRD) mandates limited assurance for companies within its scope. This includes compliance with the ESRS – European Sustainability Reporting Standards.
Countries like France and Spain have previously implemented mandatory independent assurance for sustainability information under the Non-Financial Reporting Directive (NFRD).
Who should you turn to for assurance services?
While many financial firms offer assurance services, it pays to be selective. Some firms are coming under fire for being well-versed in financial reporting but unfamiliar with sustainability reporting standards such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB).
Using sustainability specialists instead can improve the quality of the assurance assessment, reduce costs for the reporting company and provide better insight into how to improve data management systems in the future.
In positive news, the Institute of Sustainability and Environmental Professionals (ISEP) is developing a register of carbon accounting and auditing experts to test and maintain competency standards across the sector.
An example of assurance with Verco
Verco has been working with a global Real Estate client to assure a comprehensive set of ESG metrics. The Verco team used documentation submissions and structured interviews to minimise the back-and-forth of audit queries. They reviewed the process so that all queries started from a place of understanding and were aimed at mapping the client’s processes to best practice.
In summary...
As the assurance landscape evolves, companies face both challenges and opportunities. The growing complexity of sustainability data, the need for sector-specific expertise, and the tightening of regulatory requirements all demand a proactive approach. With the right support, assurance can be a powerful tool for building credibility, improving systems and driving sustainable growth. That’s why it’s so important to choose your assurance provider wisely.
Where can I listen to the full podcast?
You can listen to the full podcast here:
Where can I learn more about assurance?
In a recent webinar, ESG Assurance – what you need to know, Jing and Mark discussed frequently asked questions about assurance, including:
- What’s the difference between verification, assurance and certification?
- How do I choose between different assurance standards?
- How would I assure quantitative data? What about qualitative data?
- What’s the difference between pre-assurance and assurance?
- How and why do limited and reasonable assurance differ?
If you’re interested in assurance, but want to grasp the basics before you start, it's a great introduction to what you need to know.
How do I find out more about Verco's assurance services?
If you’d like to know more about the assurance services Verco can offer, take a look at our service document.
If you have any questions, please don’t hesitate to get in touch.
Experts on the topic
