1 August 2022
Study by IFAC, AICPA and CIMA
The study examined global trends in both sustainability-related reporting and related assurance services. The results of the study show that increasing number of companies obtain independent assurance on sustainability data. It was found that:
- 58% of global companies obtained ESG assurance in 2020
- Assurance engagements were mostly limited in scope
- 61% of ESG assurance services were performed by professional accounting firms
Reporting on environmental, social and governance (ESG) information is becoming more prevalent. The study data shows that 89% of companies presented at least some information in each of four categories: greenhouse gasses, other environmental factors, social and governance. Yet only 43% provided assurance for all four categories. The most common area for independent assurance was greenhouse gases (95%). Some 61% of assurance engagements were performed by firms within the accountancy profession.
To read more you can find the article here.
Context for the beginners
International investors with global investment portfolios are increasingly calling for high quality, transparent, reliable and comparable reporting by companies on climate and other environmental, social and governance (ESG) matters.
On 3 November 2021, the International Sustainability Standards Board (ISSB) was formed to help meet this demand.
The intention is for the ISSB to deliver a comprehensive global baseline of sustainability-related disclosure standards that provide investors and other capital market participants with information about companies’ sustainability-related risks and opportunities to help them make informed decisions.
To date the following exposure drafts were issued:
IFRS S1 General Sustainability-related Disclosure Requirements Read Here
IFRS S2 Climate-related Disclosures Read here.
Why is this important to us?
Accounting professionals are urged to keep up to date with relevant frameworks on sustainability reporting. Sustainability is fast emerging and increasingly important requirement providing opportunities for accountants.