Assurance of Sustainability Reports

Professor Jeffrey Ridley Professor Dr. Kenneth D’Silva

Centre for Research in Accounting, Finance & Governance London South

Bank University, London, England

CIBS LECTURE 14TH FEBRUARY 2012

EABIS 9th Annual Colloquium 2010 St. Petersburg, Russia

Contribution of Internal Auditing to Sustainability Assurance in Emerging Markets

Corporate Governance Vol. 11 issue 4 2011

- A New Era of Sustainability

UNGC (2010)- Vision 2050 – The new business

agenda WBCSD (2010)

- Europe 2020 – A strategy for sustainable and inclusive growth

EUROPEAN UNION COMMISSION (2010)

Governance and Stakeholder Theories

...encompasses environmental, social and corporate governance issues, as embodied in its Ten Principles which cover UNGC (2010)

HUMAN RIGHTS

LABOUR

ENVIRONMENT

ANTI-CORRUPTION

Nine Sustainable Pathways 2050

WBCSD (2010)

PEOPLE’S VALUES * HUMAN DEVELOPMENT

ECONOMY * AGRICULTURE * FORESTS

ENERGY & POWER * BUILDINGS

MOBILITY * MATERIALS

Vision 250 WBCSD (2010 p. 60)

With significantly more capitalflowing among increasing groups ofcollaborators, there will be growing

demand for transparency, whichinvolves reporting, accounting and

assurance services.

Current Organisation Issues and Guidance UNGC (2010) p. 47

Interrelated sets of enabling conditions for [FULLY] integrated sustainability

CUSTOMERS

EDUCATION

MEASURES

REGULATION

EUROPE 2020 (EC 2011)

The Commission is proposing five measurable EU targets for 2020 that will steer the process and be translated into national targets:

- employment - research and innovation - climate change and energy- education - poverty

They represent the direction we should take to measure our success.

Our Content Analysis of UNGC New Era of

Sustainability• YES NO

• MANAGE W AUDIT

• MONITOR O ASSURANCE

• MEASURE R COMPLIANCE

• GOVERNANCE D CHECK

• REGULATE S INSPECT

• REPORT

Monitor & Measure

SUSTAINABILITY ASSURANCE UMBRELLA

Internal External Independent

Objective

Management GlobalSupervisionGovernment

Regulator

INTERNAL AUDIT

Independent

Objective

EXTERNAL AUDIT

International Research Conference 2011 The Sustainability Challenge

Assurance of Sustainability Reports:Insights And Evidence from

UK Companies

Included - Anuj Saush, LSBU Energy & Environment Manager

Research Paper AbstractPurpose

The purpose of the paper is to illuminate

the linkage between governance and

sustainability considerations, and to

highlight the fact that the value of

sustainability reporting is diminished

when it is not independently assured

Research Paper Structure

INSIGHTS

1. Governance and Stakeholder Theory

2.International Guidelines for Sustainability Reporting and ASSURANCE

EVIDENCE

3.Current reporting practices and ASSURANCE in UK companies

POLICY CONSIDERATIONS AND CHANGE

Sustainability Reporting Guidelines

GRI (2011)

Uses the term ‘external assurance’ to

refer to activities designed to result in

published conclusions on the quality of the

report and the information it contains.

Assurance in UK Companies

8 GRI Reporting Framework registered 18/5/2011

Application Levels Reported

Acelor Mittal A+ x 2Anglo American A BAE Systems B+ x 1BG Group B x 1 British American Tobacco C+ x 1London 2012 CSegro U* x 3Thomas Cooke Group

Assurance in UK Companies Assurance

Content Analysis

Published

Conclusions

Policy Considerations and Change

ORGANISATION ASSURANCE CHANGES NEEDED

Stakeholders – involvement evident before reporting

Responsibility – include verification practices in reporting

Board – to be driven by all board committees

Coordination of assurance – evidence of independence

Published conclusions – compliance with GRI framework

Motivation for improvement – use of awards and standards

MULTI-CHOICE QUESTIONS