ESG / Sustainability Assurance

Service description

ESG or sustainability assurance is an independent examination of a company's environmental, social, and governance disclosures — greenhouse gas emissions, for example — reporting whether they're fairly stated. It's most often requested by a large customer, lender, or investor asking for assured ESG data, or by a company voluntarily building credibility into its own sustainability report.

Common industries

Any business publishing ESG or sustainability disclosures that a customer, lender, or investor wants independently assured.

ROI

Credible, assured ESG data satisfies large-customer and regulatory demands and avoids greenwashing risk — an emerging, standards-in-flux area.

Benefit

Independent assurance over sustainability/ESG disclosures as customer and (especially EU) regulatory requirements take hold.

Why get it

A sustainability report a company writes about itself carries less weight than one a customer or investor can trust; independent assurance gives that data the same kind of credibility an audit gives financial statements.

When you benefit

Typically annual, aligned with the company's sustainability report or the reporting cycle of whichever customer, lender, or investor requested it.

What it costs

Usually a fixed fee, scoped to the disclosures being assured and the level of assurance requested.

When you pay

Commonly billed as one fee once the scope and assurance level are set, due at or after delivery of the assurance report.

Other costs

Building the data collection and reporting process the assurance provider will test — if the company doesn't already have one — is separate from the assurance fee.

Risks to know

This is a standards-in-flux area: there is no single, settled U.S. reporting or assurance standard today, so scope and rigor are largely the company's or its counterparty's own choice rather than a fixed requirement. A superficial engagement can also draw a greenwashing accusation if it doesn't test the underlying data closely.

When risks arise

Because there's no fixed federal filing deadline behind this service today, risk concentrates around whichever customer, lender, or investor deadline is driving the engagement, and around how the disclosures hold up if a counterparty examines them closely.

The process

The provider scopes which disclosures and what level of assurance to test, reviews the underlying data and methodology, and performs procedures to support its conclusion. It reviews findings with the company before issuing its assurance report alongside the sustainability disclosures.

Your commitment

The company shares its sustainability report or disclosures, the underlying data and methodology behind them, and access to the staff and systems that produced the numbers being assured.

Documents to gather

• Sustainability or ESG report and the disclosures to be assured
• Underlying data and methodology used to calculate the disclosed figures
• Any framework or standard the disclosures are prepared against

Helpful reading

• The Future of ESG Is … Accounting? — Harvard Business Review
• Sustainability Accounting—Driving Better Returns Through Better Business — The CPA Journal