Tag Archives: Sustainability Reporting

Global Reporting Initiative (GRI) Certified Training + Integrated Reporting

Indiana Memorial Union Fountain. Credit: Gwen White

Indiana Memorial Union Fountain. Credit: Gwen White

This is a reminder of an upcoming GRI + Integrated Reporting training offered by the ISOS Center for Social Responsibility in collaboration with the School of Public and Environmental Affairs (SPEA) . Please join us for the CSR Institute at Indiana University in Bloomington, Indiana, September 24-26.

During the three-day training, participants will learn about managing the sustainability reporting process, identifying critical risks and opportunities and communicating sustainability objectives. Participants will be given hands-on instruction on the most up-to-date GRI G4 sustainability reporting framework using sustainability reports from leading organizations as case studies.

Sustainability and integrated reporting practitioners and users of sustainability and integrated reports will find value in the integrated reporting workshop. For reporting practitioners, it should provide information about acquiring competitive advantage through implementing an integrated reporting process. For users of these reports, it should provide knowledge about integrated reporting from the users perspective.

I hope to see you there!

Research on Assurance

One of SpaceX's "assurance" modes. Credit: SpaceX/Roger Gilbertson

One of SpaceX’s “assurance” modes. Credit: SpaceX/Roger Gilbertson

Assurance on sustainability reports – How is it perceived?

As companies start to invest in assurance for their sustainability reports, they have to wonder “is it worth it?” Academic studies can shed some light on this.

In a 2105 study, researchers at the University of New South Wales in Australia looked at whether assurance of environmental, social, and governance (ESG) indicators affected investors’ willingness to invest in a company.

Researchers presented a sustainability report with ESG indicators to graduate students in a master’s of financial analysis program. These were students who were “sophisticated” users of financial information. They were told that they had inherited some money (lucky for them) and were to indicate their willingness to invest the money in a company. The researchers varied which students were given sustainability reports with assurance vs. no assurance and whether the company’s strategy and ESG indicators were aligned. For example, assume a retail grocery’s strategy is aimed at supporting products that are based on environmental stewardship. A strategically aligned ESG indicator would be the percentage of animal products sold that are sourced from sustainable agricultural practices.

What did they do with their inheritance?  Study participants, aka, investors, were more willing to invest if the company had its ESG indicators assured. Assurance made a statistically significant difference! It also mattered to these investors if the ESG indicators had a high relevance to the companies’ strategy. This is an important result, especially as companies decide on what sustainability metrics to report. Just reporting for the sake of reporting does not mean as much as reporting what matters. This sounds very much like the essence of the GRI G4 Sustainability Reporting Guidelines.

This is just one study, but an interesting one that supports the role of assurance in giving credibility to sustainability reports. There are other assurance studies that I will talk about in future blogs.

Assurance and the Global Reporting Initiative (GRI)

Late afternoon light on Lake Michigan, Evanston, IL

Late afternoon light on Lake Michigan, Evanston, IL

Having just finished revising my book, Sustainability Reporting: Getting Started, assurance and the Global Reporting Initiative (GRI) are on my mind.  In my previous post I wrote about why we need to have sustainability reports assured. We hope that we can believe what we read in sustainability reports; third party assurance may give us some level comfort about the accuracy of the information reported in them.  Accuracy is never guaranteed, but at least it is a step in the right direction.

Because the GRI Sustainability Reporting Guidelines is the most widely used framework for sustainability reporting, they figure prominently in the landscape of reporting.  GRI pronouncements about assurance have significant consequences for how assurance is provided  and reported in sustainability reports. Although the GRI 
recommends the use of external assurance, it is not a requirement to be ‘in accordance’ with the Guidelines
.

The Guidelines do have something to say about how assurance reports are disclosed. Organizations that want to be “in accordance with” the GRI guidelines are required to indicate whether they have an external assurance report. In addition, for each disclosure in the sustainability report, the organization has to say whether or not it has been assured. In essence, it is a checklist of what has and has not been assured by an external third party.

The GRI has issued a clarification and a change to the guidelines!

On August 5, 2015, the GRI Global Sustainability Standards Board (GSSB) issued an interpretation on how an organization should reference its external assurance reports. This interpretation acknowledges there is confusion about assurance reports because readers do not always understand the language in them. Assurance reports come in many different permutations so this statement rings true. The recently issued interpretation recommends that organizations explain the assurance standards used, the level of assurance obtained, and any limitations of the assurance process.

The GSSB decided that organizations are no longer required to indicate assurance for each disclosure.  Basically, the checklist is gone. Instead, reporters will provide readers with a summary of the assurance process and what the report means. This helps the reporters and the readers to understand more about what is being assured and how.

I think this change in how an organization reports its third party assurance is a positive step for reporters and readers. GRI’s stakeholders are seeking improvement to the guidelines and the GRI GSSB is responding in ways that are making the assurance of sustainability reports easier to understand.

 

 

Global Reporting Initiative (GRI) Chicago Training

Cloudgate in Chicago's Millennium Park

The “Bean” or more precisely, “Cloudgate” in Chicago’s Millennium Park.

If you want to learn about the Global Reporting Initiative (GRI) framework for sustainability or corporate social responsibility (CSR) reporting, I will be teaching a two-day training event in Chicago, August 27-28, 2015. To register, visit http://www.isoscsr.org/trainings/gri-training-chicago. We should have a great time in a great city!

Assurance is key to justifying trust in sustainability reports

Assurance sounds so reassuring! Something that is assured should give you confidence that it is credible. Shouldn’t it?

Consider the case of audited (assured) financial statements conducted by independent CPAs. Let’s say that they give an unqualified or “clean” opinion to a company’s financial statements. After reading such a report you should have confidence that the numbers are “fairly” presented. But what does fairly presented mean? It does not necessarily mean that the company is doing well. It only means that the numbers and information contained in the report fairly represent what is going on with the company. Financial statement audits are done in accordance with generally accepted auditing standards, and the final audit report must use standardized wording. Indeed there aren’t a lot of choices in how the audit is done or in how the report is worded.

What about assurance for sustainability reports? Unlike financial statement audits for publicly held companies, assurance isn’t required and standards are still developing. Yet demand for report assurance is increasing as more people depend on sustainability reports to make decisions about these companies. They want to be assured that the information in the report is accurate.

What are the options for report assurance? There are several choices to be made. First, who is doing the assuring? There are many groups (e.g., accountants, consultants, engineers) that do this work and each of them has a different perspective on report assurance. Second, which standards do they use in evaluating the report? Some standards are intended to evaluate stakeholder engagement and materiality processes while others are intended to attest to the accuracy of the information presented. The scope of the assurance also varies. Some companies, for example, only have their greenhouse gas (GHG) emission disclosures verified while others have a review of the entire report conducted.

In my next post, I will talk more about these different assurance options.