How can you use third-party assurance providers to improve your sustainability report?
Sustainability reporting is a powerful way to communicate your corporate social responsibility (CSR) performance and impact to your stakeholders. But how can you ensure that your report is credible, transparent, and aligned with best practices? One way is to use third-party assurance providers, who can help you improve the quality, accuracy, and relevance of your sustainability report. In this article, you will learn how to use third-party assurance providers to enhance your sustainability report and gain more trust and recognition from your audience.
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Judy KuszewskiChief Executive at Sancroft - Sustainability and ESG Consultancy
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Amanda ChuahReal Estate & Sustainability Crusader| REIT, Equities & Precious Metals Enthusiast |
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Islam Abdeldayem 🇪🇬Sustainability and Sustainable Finance|ESG|Deputy Manager @ Suez Canal Bank|Credit Certified | Credit Risk Expert |…
Third-party assurance is a process of verifying and validating your sustainability report by an independent and qualified external provider. The provider can check your data, methods, and disclosures against certain standards, frameworks, or principles, such as the Global Reporting Initiative (GRI), the International Integrated Reporting Council (IIRC), or the AccountAbility Principles. The provider can also assess your materiality, stakeholder engagement, and governance processes, and provide recommendations for improvement.
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From my perspective in working in the investor relations field, third-party assurance offers stakeholders, including investors, consumers, employees, and communities, confidence in the accuracy and completeness of sustainability information provided by organisations. By subjecting their sustainability reports to external scrutiny, companies demonstrate their commitment to transparency and accountability, fostering trust and credibility in their sustainability efforts.
Third-party assurance can help you increase the credibility and reliability of your sustainability report, as it demonstrates that you have followed a rigorous and objective process of reporting. It can also help you improve your sustainability performance, as you can identify and address any gaps, risks, or opportunities in your CSR strategy and practices. Moreover, it can help you enhance your reputation and stakeholder relations, as you can show your commitment to accountability, transparency, and continuous improvement.
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In my experience : Third-party assurance adds credibility to your sustainability report. External assurance providers bring independence and objectivity to the evaluation process, validating the accuracy and reliability of the reported information. Stakeholders, including investors, customers, and regulatory bodies, are more likely to trust a report that has undergone independent verification.
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Trust is hard to find but easy to lose. You may be acting responsibly but without 3rd party verification, many stakeholders will not see it or believe it. Seek out the gold standard, high bar, accreditations (like Fair Tax Mark, in the realm of tax/finance and sustainability). They're the safest bet in the long run for building trust, because they'll only ever place you in good company among other exemplars of excellent responsible practice. They'll likely also bring a healthy challenge and help you to meaningfully improve your strategies and performance.
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It's essential to understand what decisions your report readers need to take on the basis of your reported information. If users need to make decisions based on the factual accuracy of reported data, for example - commonly thought true of financial reporting - then assurance is needed to confirm the specific reliability of that data and the systems that generated it. In sustainability reporting, these decisions may be more nuanced. Is the company asking the right questions of its sustainability strategy or performance? How well or poorly has the company done in relation to its environmental and social risks and impacts? Can they be trusted to do the right thing for people and planet? These questions require a much different approach.
There are many factors to consider when choosing a third-party assurance provider, such as their expertise, experience, reputation, and cost. You should also look for a provider that has a clear and consistent methodology, a strong ethical code, and a stakeholder-oriented approach. You should also check their credentials and accreditations, such as the AA1000 Assurance Standard, the ISAE 3000 Assurance Standard, or the GRI Certified Training Program. You should also compare different providers and ask for references and samples of their work.
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Remember that credentials alone won't guarantee a good assurance engagement. An assurance provider should be able to maintain their focus on the ESG outcomes to which their services contributes, and should be willing to challenge the client beyond box-ticking.
Before engaging a third-party assurance provider, you should prepare your sustainability report according to the relevant standards, frameworks, or principles that you want to follow. You should also ensure that you have a clear and robust materiality process, a comprehensive and inclusive stakeholder engagement process, and a sound and transparent governance process. You should also collect and document all the evidence and data that support your claims and disclosures, and organize them in a logical and accessible way.
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Depending on the methodology, standards and levels of assurance being sought, the evidence required to support the assertions in a sustainability report could be very demanding. Be prepared to be challenged, and engage in the give-and-take that is fundamental to the assurance process. Moreover, make sure you understand intimately the reporting standards, measurement protocols and sustainability frameworks you rely on for your report - not only for the sake of the assurance process, but to deliver authentic, transparent and professional reporting that supports accountability.
Once you have selected and contracted a third-party assurance provider, you should work with them in a collaborative and constructive way. You should provide them with all the information and documents that they need to conduct their assurance, and respond to their queries and requests in a timely and accurate manner. You should also be open to their feedback and suggestions, and implement their recommendations as much as possible. You should also communicate with them regularly and keep them updated on your progress and challenges.
After completing the third-party assurance process, you should communicate your results to your stakeholders in a clear and concise way. You should include the assurance statement or opinion in your sustainability report, and highlight the key findings and recommendations of the assurance provider. You should also explain how you have followed the assurance standards, frameworks, or principles, and how you have addressed any material issues or concerns. You should also acknowledge and appreciate the contribution and value of the assurance provider, and express your willingness to improve your sustainability reporting in the future.
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