As market and stakeholder expectations evolve and mandatory reporting requirements quickly approach, the ESG disclosures companies publish must be accurate, reliable, complete, and ultimately, ready for assurance to provide confidence in your business – including transparently reporting on climate action, social issues (e.g., diversity, equity, inclusion, respect for human rights and Indigenous reconciliation) and ethical governance practices.
Regulators are also working at pace to develop ESG-related disclosure rules/standards, including the EU Corporate Sustainability Reporting Directive (CSRD), the International Sustainability Standards Board (ISSB) and the US SEC climate change disclosure rules.
Depending on the jurisdiction, ESG disclosures may require limited or reasonable assurance, the latter having the same rigor demanded in your financial statement audit; we expect eventually many jurisdictions will require reasonable assurance. ESG assurance providers should have the same deep level of understanding of a company’s business model that is required for an audit of financial statements, which is generally the company’s external auditor. When financial statement auditors also provide assurance over ESG information, it can help eliminate redundancy in work performed, better understand interrelations between financial and non-financial information reported, and lead to cost efficiencies in preparing both types of reporting.
