Key considerations for sustainability reporting and assurance readiness

The importance of assurance on the information and disclosures within the sustainability report cannot be over-emphasised. An organisation’s maturity journey to assurance over sustainability disclosures involves preparing for internal and external assurance. It involves factors such as the organisation’s controls and processes, and the availability and quality of data for sustainability reporting.

As organisations prepare for the verification of sustainability disclosures, they should consider the specific risks that lurk within the assurance exercise.

Understanding these risk areas will help organisations better prepare for assurance and improve the overall quality of sustainability reports. Some considerations for organisations during the assurance readiness process for sustainability reporting include the following.

The high levels of uncertainty, assumptions and model sensitivity that accompany the use of estimates and scenarios in sustainability reporting are a high-risk area that organisations must pay attention to.

Non-financial reporting relies heavily on estimates and scenario analysis to translate non-financial information into financial insights.

Having in place a rigorous assurance readiness process to verify these estimates and scenario analysis will increase confidence in the sustainability information.

Another area for organisations to consider is the availability of sustainability-related data across their value chain. It is a high-risk area because these extend beyond the organisation’s control, with limited access, inconsistent methods, and third-party dependencies.

Considering how to verify and build confidence across the organisation’s value-chain data is a critical component of the assurance readiness process. Also, organisations need to consider the judgments and biases that surround qualitative narratives in sustainability reports.