What is Assurance for ESG and sustainability reporting?
Choosing the right level of assurance empowers you to strengthen the integrity of your reporting.
Assurance refers to the independent verification of Environmental, Social, and Governance (ESG) data and reporting disclosures: The assurance process assesses an organisation’s data to confirm its accuracy and completeness.
Assurance is becoming increasingly important in the ESG reporting landscape, transitioning from a “nice to have” to a “must-have.”
Two factors largely drive this shift:
- heightened pressure from regulatory frameworks, for example CSRD; and
- growing demand from stakeholders.
By verifying claims through an independent third-party verifier, the risk of greenwashing, non-compliance and potential material misstatements is significantly reduced.
What does ESG assurance involve in practice?
The assurance process involves reviewing reporting methodologies and data collection processes, scrutinising audit trails to ensure the reported data is accurate and complete. Additionally, assessing reporting governance and testing internal controls is integral to the process.
There are two main types of assurance: reasonable (also referred to as ‘high’ assurance) and limited (also referred to as ‘moderate’ assurance). Both types are commonly used in ESG reporting.
- Reasonable assurance provides a high level (but not absolute level) of assurance of historical sustainability information. It involves thoroughly testing data, tracing it back to original sources and gathering extensive evidence to ensure that reported information is accurate and complete.
- Limited assurance offers a lower level of assurance, which has a lower level of data collection, to assess the accuracy of the sustainability information. This level of assurance is suitable for organisations that are still developing their ESG data maturity.
Both assurance options enhance organisational credibility by providing independent third-party assurance, which builds stakeholder trust and promotes continual improvements in data quality through enhanced internal controls and targeted gap analysis.
How can Inspired help?
Ultimately, choosing the right level of assurance will empower organisations to strengthen the integrity of their ESG reporting, build trust with stakeholders, and confidently advance toward greater transparency and accountability.
Engaging with qualified, independent third-party assurance professionals is essential for assessing data maturity and reporting requirements and to help determine the most appropriate level of assurance.
If you would like to learn more about how Inspired’s experts can support your ESG and sustainability reporting, please email us at [email protected]
