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GRI Conference - 27 May - Owen - Assurance Of Sustainability Reporting

GRI Conference - 27 May - Owen - Assurance Of Sustainability Reporting






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    GRI Conference - 27 May - Owen - Assurance Of Sustainability Reporting GRI Conference - 27 May - Owen - Assurance Of Sustainability Reporting Presentation Transcript

    • KEY ISSUES IN SUSTAINABILITY ASSURANCE Dave Owen International Centre for Corporate Social Responsibility Nottingham University Business School
    • Current sustainability assurance practice: A brief overview
      • Significant rate of growth internationally
      • Increased use of Standards—notably ISAE 3000 and AA1000AS
      • Accounting firms (predominantly the ‘big 4’) are the main assurance providers
      • Accountants overwhelmingly provide limited assurance featuring negative form opinions
      • Assurance statements rarely specify an intended audience
      • Increased trend towards offering commentary on performance and recommendations
      • Stakeholder inclusion in the process is minimal
    • Current Assurance Practice: A brief critique
      • Inconsistency in terms of objectives, scope and procedures
      • A large degree of management control over the exercise
      • Use of jargon and guarded phrases in assurance statements
      • Not much value-added for stakeholders
    • The Present Study
      • Sponsored by the ACCA
      • Interviews with senior corporate responsibility managers from ten FTSE 100 companies
      • Interviews with three categories of stakeholder – the investment community (3); prominent NGOs’ (4); the trade union movement (1)
    • Key Aims of the Research
      • Corporate Respondents:
      • Reasons for commissioning assurance
      • Factors underpinning choice of assurance provider
      • Scope and depth of assurance work desired
      • Level of resource committed to the exercise
      • Views as to necessary degree of stakeholder inclusion
      • Perceptions as to benefits accruing
    • Key Aims of the Research
      • Stakeholder Respondents:
      • Perceptions of ‘value added’ to the reporting process by assurance
      • Level of involvement experienced and desired in assurance exercises
      • Views as to actual and potential efficacy of assurance in promoting stakeholder accountability
    • Major Findings
      • From the Perspective of Corporate Interviewees
      • Assurance must provide value for money
      • Cost constraints preclude any major move towards reasonable assurance provision
      • Awareness of stakeholder detachment from the exercise, and a desire to bring about their more active involvement
      • Formalising stakeholder involvement by means of some form of stakeholder panel the favoured option (although many practical difficulties acknowledged)
    • Major Findings
      • From the Perspective of Stakeholder Interviewees
      • A clear dichotomy of views as to whether assurance adds value to the reporting process:
      • Investment community – assurance not relevant in terms of their decision-making needs; more concern with issues of data integrity and synergy with financial reporting practice than stakeholder inclusion (although some support for Expert Panels)
      • Trade union official – reservations over practical competencies of assurance providers and the institutional legitimacy of the sustainability assurance industry
    • Major Findings
      • NGO Representatives – broadly supportive of assurance (although aware of limitations); desired more involvement via participation in stakeholder panels (although concerns over domination of ‘big brand’ NGOs’, resource constraints and compromising of independence)
    • Some Corporate Governance Implications
      • The issue of the addressee for assurance statements
      • Voluntary vs. mandatory reporting and assurance
      • No form of redress for stakeholders
      • The company’s success and longevity vs. society’s sustainable development needs
      • Assurance offers a technical solution to an essentially political problem
      • “ The government isn’t doing its job…At some point you have to get to the root of the problem” (trade union official)