In Brief

Corporate sustainability reporting is becoming more widespread with each passing year, and with that growth comes the need for companies to back up their sustainability claims. The author surveyed sustainability assurance reports from 2013, and the subsequent analysis provides advice for professionals and users.

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Investors and analysts incorporate sustainability information in their recommendations, and increasingly, companies seek assurance on their sustainability reports to enhance credibility (Robert G. Eccles, George Serafeim, and Michael P. Krzus, “Market Interest in Nonfinancial Information,” Journal of Applied Corporate Finance,Dec. 19, 2011,; Roger Simnett, Ann Vanstraelen, and Wai Fong Chua, “Assurance on Sustainability Reports: An International Comparison,” Accounting Review, May 2009, This survey examines the current state of sustainability assurance—focusing on location, reasons for seeking assurance, and the various providers and frameworks available—and offers practical advice for accounting professionals. This analysis is based on random sample of 100 assured sustainability reports obtained from and the Sustainability Disclosure Database of the Global Reporting Initiative (GRI) (

Background and Intention

Assurance frameworks and standards such as professional auditing standards play a crucial role in enhancing the credibility of companies’ reports, providing guidance that can be used throughout the assurance process. Nearly 82% of the sustainability assurance reports issued by the Big Four audit firms use international assurance guidelines. The content of sustainability reports varies and may include environmental, social, and governance matters; thus, there is a need to examine the current state of sustainability assurance and the associated assurance frameworks to comprehend this mass of data. Peculiarities in each country or continent affect how audit technologies are used; such knowledge will help standards setters in laying down expectations for delivering accountability to stakeholders in terms of data accuracy and quality of processes. In addition, as government initiatives gain momentum in parts of the world, the current state of sustainability assurance and the associated assurance frameworks will help regulators scrutinize the circumstances in their own countries and propose sustainability regulations accordingly. For academics, this information will provide the necessary foundation for investigations involving other factors associated with sustainability assurance. Finally, for practitioners, it will provide an underlying basis for organizing their procedures and deciding on the level of rigor they want to achieve.

The initial survey sample included all 1,100 international firms whose assured sustainability reports for 2011, 2010, and 2009 were available at Corporate In cases where a company had multiple assurance reports, only the latest report was selected, leaving 938 reports. Furthermore, 115 companies were eliminated from the sample because they were unable to be read due to poor image quality or language (i.e., not English), and 354 international companies were eliminated because their assurance reports did not indicate the use of a sustainability assurance framework, leaving 469. A random sample of 100 observations was selected for analysis.


Assurance reports by country.

Exhibit 1 provides the number and type of assurance frameworks, reports, and providers by country. The United Kingdom had the highest number of assured sustainability reports (12%), followed by Spain (8%) and South Korea (7%). The large number of assured sustainability reports from the United Kingdom can be attributed to various factors; perhaps the most influential was the report Exchanges and Sustainable Investment (Dan Siddy, Delsus Limited, Aug. 1, 2009). In addition, the London Stock Exchange established several sustainability indices in 2001, leading companies to adopt assurance to be listed on these indices.


Number & Type of Assurance Frameworks, Reports, & Providers by Country

Country; Number of Reports; Assurance Frameworks; Assurance Providers/Audit Firms; Reports by Audit Firms; Reports by Technical Experts United Kingdom; 12; ISAE 3000, AA1000AS; Deloitte, EY, PWC; 4; 8 Spain; 8; ISAE 3000, AA1000AS; Big Four; 7; 1 South Korea; 7; ISAE 3000 and/or AA1000AS; PWC; 1; 6 Brazil; 6; NBC to 3000, AA1000AS, NPO 01 by IBRACON; PWC; 2; 4 India; 6; ISAE 3000, AA1000 AS; EY and KPMG; 4; 2 Australia; 5; AA1000AS, ISAE 3000; KPMG, Thomas Davis and Co.; 2; 3 Netherlands; 5; Dutch 3410N, ISAE 3000; EY, KPMG, PWC; 5 Sweden; 5; RevR 6 standard issued by FAR; Deloitte, EY, KPMG; 5 China; 4; ISAE 3000, AA1000AS; PWC; 1; 3 Finland; 4; ISAE 3000, AA1000As; KPMG, PWC; 3; 1 Germany; 4; ISAE 3000, AA1000AS; PWC; 4 Portugal; 4; ISAE 3000, AA1000AS; Deloitte and KPMG; 4 Canada; 3; ISAE 3000; EY, PWC; 3 Denmark; 3; ISAE 3000, AA1000AS; Deloitte, PWC; 3 France; 3; ISAE 3000; EY, KPMG; 3 Hong Kong; 3; ISAE 3000, AA1000AS; PWC; 1; 2 Japan; 3; ISAE 3000, J-SUS; EY, KPMG, PWC; 3 Chile; 2; ISAE 3000, ASS1000AS; Deloitte; 1; 1 Italy; 2; ISAE 3000; Deloitte; 1; 1 South Africa; 2; ISAE 3000; Deloitte, KPMG; 2 Argentina; 1; ISAE 3000; PWC; 1 Austria; 1; ISAE 3000; PWC; 1 Belgium; 1; ISAE 3000; EY; 1 Greece; 1; ISAE 3000, AA1000AS; Deloitte; 1 Malaysia; 1; ISAE 3000, AA1000AS; 1 Mexico; 1; ISAE 3000; 1 Sri Lanka; 1; ISAE 3000; EY; 1 Switzerland; 1; ISAE 3000; PWC; 1 United States; 1; AICPA; Deloitte; 1 Total; 100; 66; 34

In the United States, only 10% (26 companies) of the sustainability reports were assured in 2013 (Trends in External Assurance of Sustainability Reports: Spotlight on the USA, GRI, April 2013, This may be due to compliance requirements such as the SEC’s conflict minerals rule, and the Environmental Protection Agency’s greenhouse gas reporting rule, which overshadow the need for assurance. It is estimated, however, that the total demand for sustainability assurance will reach $258 million by 2017.

Exhibit 1 also lists the assurance frameworks used in different countries. International frameworks (ISAE 3000 and/or AA1000AS) were the most often used; national frameworks were used in Brazil (NBC to 3000, NPO 01 by IBRACON), the Netherlands (3410 N by Royal NIVRA), Sweden (RevR6 by FAR), and the United States (AICPA). Because there is no governing body that recommends the use of one or more assurance frameworks, assurance providers are free to choose any of the available frameworks.

Exhibit 1 also shows the number of reports in each country that were assured by Big Four audit firms and by specialist assurance providers/technical experts. In the United Kingdom, eight assurance reports (67%) were issued by specialist assurance providers/technical experts, while the remaining four (33%) were issues by the Big Four. In Spain, however, seven out of eight assurance reports (87.5%) were issued by the Big Four. This is due to historical differences in reporting regimes between the two countries; Spanish companies are required by law to disclose the impact of sustainability issues on the financial position of the company. Furthermore, in Brazil, Chile, China, Finland, Hong Kong, India, Italy, South Korea, Spain, and the United Kingdom, all or some of the Big Four firms exist alongside specialist sustainability assurance providers/technical experts, which provides motivation for these firms to compete for business in the sustainability assurance market.

Assurance reports by continent.

Viewed by continent, the majority of assured sustainability reports (54%) are from Europe, due to regulation, stock exchange listing requirements, and other policies in that region. The next highest percentage is in Asia, with 25%, which might be attributed to slow growth in Asian countries due to the global economic crisis during 2008–2012. South America is next at 9%, followed by a tie between Australia and North America. Only 2% of reports came from Africa.

Regulation or anticipation of regulation is driving the growth in sustainability reporting (The KPMG Survey of Corporate Responsibility Reporting 2013,; regulation or stock exchange requirements already exist in Denmark, France, Norway, and the United Kingdom. In addition, some Asian countries (China, Hong Kong, India, Indonesia, Japan, Malaysia, Singapore, and Taiwan) have also taken the lead in regulation, which in turn leads to a need for assurance services.

Kinds of Assurance Providers

Audit firms.

Exhibit 2 provides details related to the type of assurance framework used by the surveyed firms. Deloitte (provided assurance for 13 companies), Ernst & Young (16), KPMG (13), PricewaterhouseCoopers (23), and Thomas Davis and Co. (1) provided assurance on 66 reports in 27 countries; one or more of the Big Four audit firms provided assurance on sustainability reports in all of these countries (Exhibit 1). They used international assurance frameworks (Exhibit 3) in 53 of 65 reports (82%) and used other frameworks in the remaining 12 (18%). Interestingly, the Big Four provided financial statement assurance for 58 of the 65 companies (89.2%, not shown in the tables). 84.62% of the assurance reports (11 of 13 reports) provided by Deloitte used international assurance frameworks; the remaining 15.38% used AICPA and Swedish RevR 6 guidance. International frameworks include ISAE 3000 and/or AA1000AS. Comparable percentages are: Ernst & Young (EY), 75%; KPMG, 76.92%; PricewaterhouseCoopers, 86.96%.


Audit Firms’ Use of Assurance Frameworks

Assurance Framework; Deloitte; EY; KPMG; PWC; Thomas Davis & Co. AICPA; 1 Dutch Royal NIVRA 3410N; 1; 1; 1 ISAE 3000; 8; 8; 9; 11; 1 ISAE 3000 & AA1000AS; 3; 4; 1; 9 ISAE 3000 & J-SUS; 1 NBC to 3000; 1 NPO 01 by IBRACON; 1 Swedish RevR 6 by FAR; 1; 2; 2 Total; 13; 16; 13; 23; 1


Big Four Details – Classification of Reports

Audit firm; Deloitte; EY; KPMG; PWC; Total; Percentage Number with international frameworks; 11; 12; 10; 20; 53; 81.54% Number with other assurance frameworks; 2; 4; 3; 3; 12; 18.46% Total; 13; 16; 13; 23; 65; 100.00%

Only two of 100 reports used two assurance providers. In one case, KPMG provided assurance with EY for the French oil and gas company Total S.A. using ISAE 3000 (not tabulated). The Big Four firms appear to favor the use of ISAE 3000 individually or together with AA1000AS over using AA1000AS individually, as discussed below.

Specialist assurance providers/technical experts.

Exhibit 4 shows that specialist assurance providers/technical experts provided assurance on 34 sustainability reports. In one case (not tabulated), two specialist assurance providers/technical experts, Two Tomorrows and Ethos International, worked together to provide assurance for Tieto Corporation (United Kingdom) using AA1000AS. These specialist assurance providers/technical experts have knowledge of subjects such as verification of carbon footprints, demonstration of sustainable sourcing for manufactured products, obtaining various ISO certifications, and certification of supply chains, among others. Exhibit 5 shows that the AA1000AS framework has been used by 76.47% of the specialist assurance providers/technical experts.


Specialist Assurance Providers/Technical Experts by Country

Country; Specialist Assurance Provider; Percentage United Kingdom; Bureau Veritas, Citrus Partners, Corporate Citizenship, DNV, LRQA, SGS, Two Tomorrows; 23.53% South Korea; BSI, CAU, KMAR, South Korea Productivity Center, Two Tomorrows; 17.65% Brazil; BSD, Bureau Veritas, DNV; 11.76% Australia; Banarra, Net Balance,; 8.82% China; BSI, DNV, LRQA; 8.82% Hong Kong; Sustain Asia; 5.88% India; DNV; 5.88% Chile; Bureau Veritas; 2.94% Finland; ECOBIO; 2.94% Italy; RGA; 2.94% Malaysia; OWW; 2.94% Mexico; Redes Sociales; 2.94% Spain; SGS ICS Iberica, S.A.; 2.94% Total; 100.00%


Specialist Assurance Providers/Technical Experts’ Use of Assurance Frameworks

Assurance Framework; Percentage AA1000AS; 76.47% ISAE 3000; 11.76% ISAE 3000 & AA1000AS; 11.76% Total; 100.00%

Specialist assurance providers/technical experts appear to be more comfortable using AA1000AS by itself, as opposed to the Big Four, since it is provided by an organization that is not involved with the audit profession (i.e., AccountAbility). Only 11.76% of specialist assurance providers/technical experts used the ISAE 3000 framework, and an equal number used ISAE 3000 and AA1000AS together. This means, however, that all of the specialist assurance providers/technical experts used international frameworks.

Exhibit 4 also shows the countries in which specialist assurance providers/technical experts provided assurance. The top three are the United Kingdom (23.53% of reports), South Korea (17.65%), and Brazil (11.76%). This shows that specialist assurance providers/technical experts are being sought after internationally to provide assurance, which emphasizes their reach and legitimacy.

Differences in the choice of assurance frameworks.

The data discussed above suggests some differences in the choice of assurance frameworks by audit firms and specialist assurance providers/technical experts. ISAE 3000 seems to be more popular among audit firms (Deloitte, 61.54% of engagements used ISAE 3000; EY, 50%; KPMG, 69.23%; PWC, 47.83%), while specialist assurance providers/technical experts seem to favor AA1000AS (76.47%, vs. 11.76% for ISAE 3000). ISAE 3000 was issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). The audit parameters given in ISAE 3000 are similar to traditional financial statement auditing.

Specialist assurance providers/technical experts prefer to use AA1000AS, issued by AccountAbility, a non-profit organization that provides “solutions to the most critical challenges in corporate responsibility and sustainable development.” AA1000AS also provides guidance on the “quality of sustainability performance information disclosed by an entity” and helps in the “alignment of nonfinancial aspects of sustainability with financial performance.” Specialist assurance providers/technical experts who have the necessary competence to evaluate the quality of sustainability performance data because of their subject matter expertise, may find it more natural to use AA1000AS.

AA1000AS and ISAE3000 can be used together (Jennifer Iansen-Rogers and Jeannette Oelschlagel, “Assurance Standards Briefing: AA1000 Assurance Standard and ISAE 3000,” KPMG and AccountAbility, April 2005). The main difference between ISAE 3000 and AA1000AS is that the former focuses on assurance procedures and the latter focuses on the quality of reporting processes. AA1000AS could be used by the reporting organization to determine reporting scope and subject matter information to report, while ISAE 3000 could be used by the assurance provider to determine the terms of assurance engagement, plan and perform the engagement, and obtain evidence and ethical requirements. The assurance provider could then use AA1000AS to provide an opinion on principles of materiality, completeness, and responsiveness.

Analysis and Practical Advice

Out of 100 sustainability assurance reports, 12 are from the United Kingdom, which can be attributed to the various sustainability initiatives in that country. Another 42 reports are from other European countries, possibly due to the widespread awareness of such issues in this region.

The assurance frameworks most often used by the Big Four are international ones, namely, ISAE 3000 and AA1000AS. Future research should examine the reasons behind the use of international frameworks by the Big Four firms. In the sample used, there is only one other audit firm outside of the Big Four audit firms.

Specialist assurance providers/technical experts provided assurance on 34 sustainability engagements. Specialist assurance providers/technical experts are more comfortable using AA1000AS from AccountAbility, while audit firms prefer using frameworks from an assurance standard setting body like IAASB. Future research should contribute to the development of standardized assurance frameworks, examine the reasons behind the existence of national assurance frameworks (such as Dutch Royal NIVRA 3410N and the Swedish RevR6), and examine the differences between international frameworks and national or other frameworks.

Assurance providers and auditors should be aware that 63% of the world’s 250 largest companies by revenue get their sustainability reports assured, and 70% of those choose a major accounting firm to do so (KPMG Survey of Corporate Responsibility Reporting 2015, Furthermore, this market is expected to grow as the number of countries that encourage or require assurance on sustainability reports increases. Secondly, audit firms and others (e.g., KPMG, Burns & McDonnell) employ sustainability professionals to provide a better understanding of the social, environmental, and governance issues that might be encountered during the assurance process. In the coming years, assurance providers with expertise in both sustainability and assurance will find themselves in greater demand than those with expertise in only one of those areas. Third, assurance providers should familiarize themselves with the international assurance frameworks, namely ISAE 3000 and AA1000AS. Fourth, assurance providers, especially audit firms, need to be aware of the policies and procedures of the accounting body or bodies in their countries; this will enable them to provide a more efficient audit while fulfilling ethical requirements. Finally, auditors should be familiar with audit technologies (e.g., automated control testing procedures, continuous monitoring, data analysis) available in their countries so as to operate effectively and maintain data integrity.


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Sunita Rao, PhD is an assistant professor of accounting at the Washburn University School of Business, Topeka, Kans.