Your 2015 annual report has been published, and it was well received. Great! But what makes the top reports stand out from the crowd? Apart from good content, assurance (or in other words, having your data audited by an external party) is high on the list. Having both the financial figures as well as key non-financial indicators assured may result in a report that is better perceived by the stakeholder, thanks to a higher level of trustworthiness of the data provided. Apart from this, there are some other advantages. Consultancy firm Sustainalize presents 5 reasons why assurance may be the next step for your reporting.
A more credible perception by external readers
Like we said above, assurance on non-financials increases the credibility of your report and as such the credibility of what you claim to have achieved in the reporting year.
Grip on your Key Performance Indicators
Assurance on non-financial data serves as a valuable internal management tool. Strong and reliable data also provide a good foundation for target setting, program development and the overall sustainability strategy.
Points in benchmarks and rating
An externally assured report will usually get substantially higher scores in major ratings such as the Carbon Disclosure Project, the Dow Jones Sustainability Index and local benchmarks such as the Dutch Transparency Benchmark and the French Vigeo.
Governments have specifically included non-financial assurance as one of the scoring elements in public tenders. As such the assurance on your non-financial data is expected to one of the game changers of the (public) tender landscape.
EU directive – 2018
Apart from these reasons, the EU has presented a directive that asks public interest companies with 500 or more employees to report on a selection of environmental and social indicators, including human rights and anti-corruption. This new regulation will probably expand in the future. We also expect such mandatory non-financial indicators to become part of the obligatory audit process – which at this time focuses only on financial indicators.
Sustainalize supports many (listed) companies with the dedicated pre-assurance service. This work provides you with insight in the quality of the sustainability data and the maturity of the reporting processes. We provide insight in the maturity of sustainability reporting, the feasibility of external assurance and the most salient steps to take in order to be fully ready for external assurance. We can assure you that our involvement will prevent you from a costly and time-consuming external assurance process (in the near future). Please check out our website for more information or contact us directly.
Nick de Ruiter and Wouter van ‘t Hoff (Sustainalize).