In the context of 90% of the S&P 500 publishing sustainability/responsibility reports, and nearly 30% of the reporters providing external assurance for some or all of their E&S disclosures in 2019 (see our report on the source G&A Institute report here), the new "ESG reporting and attestation: A roadmap for audit practitioners" from the AICPA/CAQ aims to position audit practitioners optimally vis-à-vis their company clients to discuss: (i) where and how to report ESG information (e.g., in an SEC filing or other report), (ii) whether to engage an independent accounting firm to perform an attestation engagement on the ESG information, and (iii) where to include the attestation report or reference such report.
Equally beneficial for companies, the resource addresses practical and legal considerations including the scope of information that may be covered by an attestation engagement, reporting criteria (e.g., recognized sustainability frameworks, custom metrics), differences between an examination vs. a review engagement, and reporting venue/vehicle considerations.
Note that according to the 2020 G&A Institute Report, few companies sought assurance for their entire sustainability report, as shown here:
Engineering firms were the most popular type of assurance provider (52%), followed by accountants and small consultant firms, at 24% each.
Appendix 1 of the AICPA/CAQ report provides an overview of the SASB standards, the GRI standards, the TCFD Recommendations, and the Integrated Reporting <IR> Framework; Appendix 2 lists and links to AICPA sustainability attestation resources for audit practitioners; and Appendix 3 suggests good governance actions and processes to support the integrity of sustainability information to the extent the company determines to disclose it.
See our prior report: "Auditor Assurance of ESG Information" and additional resources on our Audit & Audit Firms and Sustainability/ESG pages.
This post first appeared in the weekly Society Alert!