Limited and Reasonable Assurance
Inspired provides ESG Assurance to help clients prepare robust sustainability data, strengthen controls and report confidently.
Reasonable assurance (sometimes referred to as ‘high’ assurance) and limited assurance (sometimes referred to as ‘moderate’ assurance) are two levels of confidence third-party external verifiers provide when reviewing sustainability reporting information.
Reasonable Assurance
Reasonable assurance offers a high level (but not absolute level) of assurance of historical sustainability reporting information. This provides stakeholders with a level of confidence that the information is both accurate and complete.
Therefore, the third-party verifier must design the verification to obtain sufficient evidence to reduce the risk of material misstatement to an acceptably low level. This process involves extensive evidence gathering and detailed scrutiny of data, tracing it back to its original sources to ensure accuracy.
The findings are presented with a positive conclusion, where the verifier affirms that the subject matter is free from material misstatement, supported by a broader scope of work, thorough evidence gathering and complies to the relevant standard(s).
Limited assurance
Limited assurance is used to support companies in the early stages of their Environmental, Social, and Governance (ESG) journey.
This type of assurance can be applied when data maturity is still developing, offering a lower level of assurance but still providing moderate confidence in the sustainability information reported to stakeholders.
The process is less intensive, focusing on ensuring that the organisation has appropriate internal controls and processes in place to demonstrate the accuracy and transparency of its data.
There is a lower level of evidence gathering, to assess the accuracy of the information against the relevant standard. The assurance outcomes are expressed through negative wording. It indicates that nothing has come to the verifier’s attention to suggest a material misstatement, reflecting a narrower scope of work and less extensive testing.
| ISO 14064 | Reasonable Assurance | Limited Assurance |
|---|---|---|
| Confidence level | High | Lower |
| Evidence requirement | >70% primary data | >40% primary data |
| Risk of misstatement | Reduced to very low | Higher |
| Assurance effort | More extensive | Less extensive |
Why choose one over the other?
Choosing between reasonable and limited assurance is largely driven by the maturity of the sustainability data and regulatory expectations.
- Limited assurance is a cost-effective option for signalling a commitment to stakeholders through transparency and responsible business practices, without the burden of the extensive scrutiny that accompanies reasonable assurance.
- Reasonable assurance is more suitable for organisations with a mandatory requirement for advanced reporting and need to alleviate stakeholder pressure.
Both options enhance an organisation’s credibility through independent third-party verification, thereby increasing stakeholder trust and confidence in the reported data.
Furthermore, both processes support continuous improvement in future reporting cycles. It enhances data quality, strengthens internal controls and identifies gaps for future enhancement.
Assurance standards
There is a growing number of assurance standards aimed at enhancing the credibility and reliability of reported ESG information.
You can learn more about some of these standards here.
Inspired offers pre-assurance of emissions and sustainability information, and independent third-party assurance of emissions to ISO 14064 and sustainability information to AA1000 Assurance Standard v3.
Provides independent third-party assurance to ensure that a company’s greenhouse gas (GHG) emissions have been accurately measured, calculated, and reported according to the ISO 14064 standard.
This process offers external assurance that the emissions data are accurate, complete, consistent and derived from established methodologies.
Involves independent third-party assurance of an organisation’s sustainability information, based on the effective application of the AA1000 principles of inclusivity, materiality, impact and responsiveness. It can be used to assess the reliability and quality of specified sustainability performance information.
A comprehensive framework for sustainability assurance and stakeholder engagement, it complements other international assurance standards. It can be used with these standards’ criteria, to externally assure a range of sustainability reporting information – helping to reduce the risk of non-compliance or show best ESG practise.
Involves an independent organisation verifying sustainability information without having a role in preparing the data. The independent third-party reviews internal controls, data and compliance with the relevant standards, for example, to ISO 14064.
This process aims to ensure that the reported sustainability data or statements are accurate, complete and comply with established standards. The verifier provides a verification report and statement, outlining their conclusions and recommendations.
An initial review process that focuses on compliance, misstatements, omissions, consistency, and the risk of greenwashing before a formal external assurance engagement. This stage aims to identify non-compliance, identify gaps in data, methodology and processes and recommending areas for improvement.
This helps organisations prepare for a comprehensive independent third-party assurance, while minimising potential misstatements and non-compliance in the final disclosures.
Talk to an expert
Dr Christine Acheson
ESG Director
“With ESG Assurance fast becoming a core risk-management tool and demand accelerating faster than market capacity, organisations need support that bridges the gap between reporting and assurance.
Inspired provides ESG Assurance to help clients prepare robust sustainability data, strengthen controls and report confidently. “
Quick links
Life Cycle Assessments (LCA) / Environmental Product Declarations (EPD)
Greenhouse gas emissions verification – ISO 14064
Get in touch
Please speak to a team member today for help preparing robust sustainability data, strengthen controls and reporting confidently.