With every month, more big businesses are making the decision to create corporate social responsibility (CSR) or corporate sustainability reports. No matter which reporting guidelines they are using, a new report from independent market research firm suggests that more of them are seeking an outside affirmation or blessing that the information they are publishing is accurate.
Aside from the financial and risk management implications of sustainability reporting, companies are also seeking to avoid operating afoul of increasingly stringent rules regarding green marketing. Sustainability assurance can offer another safety check here, as well.
The Verdantix report, "Green Quadrant Sustainability Assurance (Global)," suggests that there are two really good reasons to "buy" assurance of sustainability reporting, which is akin to a financial audit.
- It will add credibility when the information is communicated outside the company
- It will help provide a reality check internally, pointing up areas that might need more attention or processes that might need adjustment
James Beresford, the Verdantix analyst who authored the report, said sustainability programs are becoming much more material to corporate financial results. That's one reason why you see some of the tradition audit firms, notably PwC and KPMG, emerging as popular choices for sustainability assurance.
"Heads of sustainability, [environmental health and safety] directors and CSR directors have typically purchased assurance of sustainability reports, [greenhouse gas] inventories and environmental management systems from a wide variety of providers. Our research found that sustainability risks tied to corporate reputation and compliance are on the rise. So CFOs are getting more involved in the selection of assurance providers. This is one reason why firms increasingly buy sustainability assurance from the Big Four audit firms."
According to Verdantix, the top companies in this space are Bureau Veritas, Deloitte, DNV, Ernst & Young, KPMG and PwC.