An article by Bryan Strickland, posted August 1, 2022 on the Journal of Accountancy webpage, says that “the percentage of companies worldwide providing assurance on ESG information continues to rise, according to the latest round of data, but the United States and the United Kingdom continue to lag behind when it comes to having auditors provide ESG assurance.”
The percentage of companies that had ESG assurance provided on their reporting rose to 58% in 2020 from 51% the previous year, according to The State of Play in Reporting and Assurance of Sustainability Information. The International Federation of Accountants (IFAC) and AICPA and CIMA co-authored the report.
The percentage of worldwide ESG assurance engagements conducted by audit firms and their affiliates went down slightly from 2019 to 2020, from 63% to 61%. The numbers rose in the United States but only from 11.1% to 16.2%. In the U.K., the percentage went from 53.5% to 42.3%.
Strickland says that “IFAC, AICPA and CIMA advocate companies opting to have their statutory auditor also perform ESG assurance engagements, and the survey found that 71% of companies using audit firms for ESG assurance are doing just that.”
Ninety-two percent of the 1,400 companies surveyed reported some ESG information in 2020, compared with 91% the previous year.
The study also highlighted some findings related to what specific ESG information companies are providing, where they're providing it, and when they're providing it.
- What: Eighty-nine percent of companies reporting ESG data in 2020 provided at least some information in each of four identified areas — greenhouse gases (GHG), other environmental, social, and governance. However, just 43% provided assurance in all four areas. GHG was the one constant, with 92% of companies reporting on it, and 95% of those providing assurance.
- Where: Seventy-six percent of companies included assurance reports in their annual reports, while 19% provided them on a company website. The United States, U.K. and Canada were outliers, collectively including assurance in annual reports less than 40% of the time, but posting it on company websites about half the time. Those numbers may speak to the more informal nature of some assurance engagements in those regions.
- When: Among the 733 companies that had both their financial audit and ESG assurance reports/signatures examined, 54 days was the worldwide average time between those issuances. The average time varies widely by country — ranging from two days in Italy to 110 days in the United States — in part because of different requirements for statutory versus voluntary disclosures by location.
For more, see More companies obtaining ESG assurance, according to global survey - Journal of Accountancy or visit the link in the second paragraph.