Sustainability Reporting and Assurance: A Historical Analysis on a World-Wide

Phenomenon
Author(s): Renzo Mori Junior, Peter J. Best and Julie Cotter
Source: Journal of Business Ethics, Vol. 120, No. 1 (March 2014), pp. 1-11
Published by: Springer
Stable URL: https://www.jstor.org/stable/42921315
Accessed: 17-05-2020 02:05 UTC

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J Bus Ethics (2014) 120:1-11
DOI 1 0. 1 007/s 1 055 1-013-1 637-y

Sustainability Reporting and Assurance: A Historical Analysis

on a World-Wide Phenomenon

Renzo Mori Junior * Peter J. Best *

Julie Cotter

Received: 8 June 2012/ Accepted: 21 January 201 3 /Published online: 8 February 2013
© Springer Science+Business Media Dordrecht 2013

Abstract Sustainability reporting and assurance ofperformed

sus- by accountants and non-accountants, and new
tainability reports have been used by organizations in an
practices have emerged, namely the "mixed approach" and
the "stakeholder or specialist review". The analysis also
attempt to provide accountability to their stakeholders.
shows
A better understanding of current practices is important tothat the practices of issuing sustainability reports
provide a base for comparative and trend analyses.and
This
having them assured have become a world-wide phe-
paper aims to consolidate and provide information on
nomenon, occurring in developed, and emerging econo-
mies around the world.
sustainability reporting, assurance of sustainability reports
and types of assurance providers. Another aim of this paper
is to provide a descriptive analysis of these practicesKeywords
for a Assurance for sustainability report •
global sample, comparing results with previous studies, and
Assurance provider • Fortune Global 500 •
suggesting opportunities for future research. To accomplish
Sustainability reporting • Sustainability report
these objectives, a literature review was performed, an
analysis of the organizations included in the Fortune Glo-
bal 500 2010 was completed, and results were presented Introduction
and consolidated by country. These results demonstrate
that all organizations analysed provided some type The of
transformation in the way business is conducted since
information in relation to their social or environmental the late 1980s and early 1990s, allied to the increasing
performance in their official website. The percentage ofrelevance of the sustainability concept in a globalized
organizations issuing a sustainability report has been scenario, has changed the business world (Moneva et al.
increasing in the last few years. However, the percentage of
2006; Mori Junior 2009; Perego 2009; Phatak et al. 2005).
organizations assuring their sustainability report has stag-
Through a survey of 1 ,946 executives representing a wide
nated. Types of assurance engagements include those
range of industries and regions, McKinsey and Company
(2010) found that more than 50 % of executives consider
sustainability "very" or "extremely" important in their
R. M. Junior (13)
business practices.
Australian Centre for Sustainable Business and Development,
University of Southern Queensland, Toowoomba, QLD, In this context, sustainability reports have been serving as
Australia
a fundamental communication tool between organizations
e-mail: renzojr@ig.com.br; renzo.morijunior@usq.edu.au and their stakeholders, focused on environmental and social
P. J. Best performance. According to KPMG (2008), close to 80 % of
Department of Accounting, Finance & Economics, Griffith the top 250 organizations listed on the Fortune Global 500 1
Business School, Griffith University, Nathan, QLD, Australia ranking (G500) issued a type of sustainability report.

J. Cotter

Australian Centre for Sustainable Business and Development, 1 Fortune Global 500 is an annual ranking of the top 500 world's
University of Southern Queensland, Toowoomba, QLD, largest corporations listed by revenue and it is published by Fortune
Australia
magazine (www.money.cnn.com/magazines/fortune/global500).

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 2 R. M. Junior et al.

This increasing
According to awareness about environmental and
previo
ability social issues and the transformation of guide
report business is also
(GRI) addressed by Conley and Williams (2005). In their study
(Borglund et
Global those issues are represented by the corporate social
Sustainabilit
To responsibility3 movement.
enhance This movement in their opinion
credibili
reports, is some
the most important development organ
in the business world
over the last decade.
independent assuran
assurance In this new ofscenario, sustainability reports have pro-
sustai
practice vided
anda vital tool for organizations
not to provide transparent
re
differentcommunication
types with their stakeholders, especially
of about e
using organizations' social and environmental performance.sc
different
Some authors argue that (Deegan
statements sustainability reports also have
Comptables Europé
been influencing the decision-making processes of different
2010; stakeholders, concerned not Global
KPMG only with economic aspects
et al. but also with environmental
2006; O'Dwye and social aspects (Barrett
Perego 2005; Futerra Sustainability Communications
2009; Romer et al. 2010;
Previous KPMG Global Sustainability Services and SustainAbility
authors h
ability Ltd. 2008). The first wave of organizations publishing their
reporting act
reports,social and
and environmental impacts started
types in the 1970s in
the United
countries and States and Western over
Europe (Kolk 2010; Owen d
ferent et al. 2001).
samples. Du
Since the 1970s, thereinforma
consolidated has been considerable diversity in
to the voluntary publication
provide a of sustainability
base reports across fo
order to better
industry sectors and countries. In the lateunde
1980s, demands
paper for clear business commitments toward sustainable
presents upda devel-
opment wereactivities,
reporting growing in response to the United Nations
reports World Commission oftypes
and Environmental and Development of
tions listed
final report and in the early on the
1990s, a few large organiza-
performs tions started to disclose
compara information voluntarily to stake-
studies holders about their environmental performance (Perez and
regarding th
and Sanchez 2009).
proposes opportu
The paper The title and scope of such reports have
also varied consid-
contr
erably, including "sustainability reports",
international "social reports",
accou
need of "corporate social responsibility reports", "social and
cross-discip
ability community
reporting, reports", and "environmental reports" (Kolk
reports, 2010;
and Owen et al. 2001). account
To provide guidance and standards for this practice,
some guidelines were developed around the world. The
Literature Review GRI is currently the most-used sustainability report
guideline, recognised and used by many organizations
Sustainability Reports around the world (Borglund et al. 2010; Brown et al. 2009).
Although there are different terms referring to this type
Society's increasing awareness about environmental of
andreporting, this study has adopted the term sustainability
report in accordance with the Global Reporting Initiative
social issues, climate change, sustainable supply chain
(2011, p. 3): "Sustainability reporting is the practice of
management, natural disasters and scarcity of natural
resources, has contributed to a transformation in the way
business is conducted (Kolk and Van Tulder 2010; Seuring
and Müller 2008). 3 Corporate Social Responsibility (CSR) has its theoretical base
notion that responsibility of an organization extends beyond the
traditional objective of providing financial returns to its shareholders.
Instead, organization's concerns should include broader objectives
2 Global Reporting Initiative is a network-based non-governmental such as: sustainable growth, equitable employment practices, and
organization that aims to drive sustainability and environmental, long-term social and environmental well-being (Conley & Williams
social and governance reporting (www.globalreporting.org). 2005).

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 Sustainability Reporting and Assurance 3

measuring, authorsand
disclosing, found that being
while there is some evidence of stake-
accountable to
and external stakeholders
holder interestfor
in assurance,
organizational
notably on the part of NGO, pe
towards the goal ofthesustainable development
real driving force behind assurance is internal to an
ability report should provide a balanced and
organization.
representation of the Assustainability
assurance of sustainability reports is performan
a relatively new
reporting practice and
organization, not regulated in the majority
including both of countries,
positive
tive contributions". there are different types of entities providing assurance
services using different scopes, methodologies, and assur-
Sustainability Report Assurance ance statements (Deegan et al. 2006; Fédération des
Experts Comptables Européens 2006; Frost and Martinov-
Owing to the relevance of sustainability reports, someBennie 2010; KPMG Global Sustainability Services 2008;
stakeholders have demanded transparency and questioned Moneva et al. 2006; O'Dwyer and Owen 2005; Owen et al.
the integrity of the information published by organizations2009; Perego 2009; Romero et al. 2010).
through sustainability reports (Laufer 2003; Moneva et al. The two most famous frameworks for assurance services
2006; Ramus and Montiel 2005). In response, some orga-used by assurers around the world are the AA1000 Assur-
nizations started to voluntarily provide external indepen- ance Standard (AA 1000 AS) launched in March 2003 by
dent assurance in their sustainability reports to improve Account Ability4 (Accountability 2011), and the Interna-
credibility and reliability. According to O'Dwyer andtional Audit Assurance Standards Board5 (IAASB)'s
Owen (2005), external independent assurance of sustain-International Standard on Assurance Engagements (ISAE
ability reports commenced in 1997-1998. 3000). It is also argued that assurance based on the com-
Various organizations have promoted the practice ofbined use of AA1000AS and ISAE 3000 is likely to deliver
independent assurance for sustainability as an instrument toenhanced results (KPMG Global Sustainability Services
improve credibility and quality of sustainability reports. and AccountAbility 2005).
For instance, GRI (2002, p. 18) encourages the independent The International Audit Assurance Standards Board
assurance of sustainability reports as an instrument to(2011, p. 19) defines an assurance engagement as "an
improve credibility and quality of sustainability reports. engagement in which a practitioner aims to obtain suf-
Regarding the reasons to have a sustainability reportficient appropriate evidence in order to express a con-
assured, in its survey of Fortune Global 250, KPMG (2008) clusion designed to enhance the degree of confidence of
found that improved quality of reported information, rein-the intended users other than the responsible party about
forced credibility among stakeholders and improved the outcome of the measurement or evaluation of an
reporting processes are the main drivers for seeking assur-underlying subject matter against criteria". It also dis-
ance of a sustainability report. According to some authors, tinguishes two types of assurance engagement - a rea-
the assurance process improves sustainability report credi- sonable assurance engagement and a limited assurance
bility. Hodge et al. (2009) in their study of 145 students engagement.
enrolled in MBA programs at two large Australian univer- While ISAE 3000' s definition of an assurance engage-
sities, found that provision of an assurance statement with ament has a more technical explanation, AA1000AS used
sustainability report engenders greater credibility in a report more common language to define it as "an engagement in
than when no such assurance is provided. In addition, they which an assurance provider evaluates and expresses a
found that report users place more confidence in sustain-conclusion on an organization's public disclosure about its
ability reports when such assurance is provided by a top tierperformance as well as underlying systems, data and pro-
accountancy firm, as opposed to a specialist consultant. cesses against suitable criteria and standards in order to
Similar results were presented by (Cheng et al. 2012), increase the credibility of the information for the intended
studying Australian graduate students enrolled in a Master audience" (AccountAbility 2008, p. 23).
of Financial Analysis. It was found that sustainability
report assurance increases non-professional investors'
willingness to invest in an organization and investors are
4 AccountAbility is a global organization providing corporate
also more willing to invest in an organization when itsresponsibility and sustainable development services (http://www.
sustainability report is assured by an accounting firm thanaccountability.org).
if the assurance provider is not an accounting firm. 5 The International Auditing and Assurance Standards Board (IA-
Owen et al. (2009) interviewed senior corporateASB) is an independent standard-setting body that serves the public
responsibility managers from ten FTSE100 organizations, interest by setting international standards for auditing, assurance, and
other related standards, and by facilitating the convergence of
and representatives of three key stakeholder groups international and national auditing and assurance standards
(investor, NGO and the trade union movement). The (http://www.ifac.org/auditing-assurance/).

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 4 R. M. Junior et al.

addressed by the ISAE

Currently, 3000 and could be adopted for
these twits
different
improvement. groups o
non-accounting This study recommends, among other things, that ISAE pr
likely to 3000 standards'
rely could be improved regarding theon inclusion th
firms tend and definition of responsibilities
to of external expertsrely
who
and Martino v-Be
are specialised in areas other than accounting and auditing,
et al. 201 1;
and clear explanation Pereg
of different levels of assurance pro-
The difference between accountants and non-accoun- vided (reasonable, limited, or no assurance).
Although accounting firms and consultants have been
tants is not just related to the framework used to perform
the assurance service. Hodge et al. (2009) argue thatcited
inas the two main groups of assurance providers for
comparison to accountants, non-accountants appear to
sustainability reports, certifiers were also cited by previous
authors (Frost and Martinov-Bennie 2010; Owen et al.
focus more on completeness, fairness, and overall balance
in the opinion statements. Perego (2009) concludes 2009;
thatRomero et al. 2010), this study adopts the term "non-
accounting firms provide a higher quality of assuranceaccounting
for firms" (Perego 2009) to refer to consultant
firms
aspects related to reporting format and procedures used andand the certifier firms.
non-accounting firms provide higher quality of assurance
for aspects associated with recommendations and opinions.
Research Methods
Frost and Martinov-Bennie (2010) analysed differences
among assurance statements issued by assurance providers.
They identified differences in the description ofThisthestudy aims to provide a descriptive analysis of current
assurance standards used during the assurance process
practices in sustainability reporting and the assurance of
(AA 1000 AS, ISAE 3000, and firm specific protocols),sustainability
in reports, comparing results with previous
studies. The G500 list was selected to be analysed because
the wording of the conclusions, in the title of the assurance
statements, in the objectives of the assurance processesitand
consists of world-leading organizations and it has been
in the assurance procedures employed. used by previous studies related to these themes (Kim and
Nam 2011; Kolk 2008; Kolk and Perego 2010; KPMG
Differences were also reported by Mock et al. (2007),
Global Sustainability Services 2008; Rikhardsson et al.
who studied 130 assurance processes applied in 130 entities
worldwide between 2002 and 2004. The authors identified 2002). The G500 list is published online (http://money.cnn.
three areas of difference: com/magazines/fortune/global500/20 1 0/full_list/).
The G500 organizations' official websites were accessed
• Different scope 67 % of the assurers provided complete
between 15/09/201 1 and 12/10/201 1. The website analysis
assurance related to the GRI reporting categories, 16 %
followed the protocol used by Rikhardsson et al. (2002),
assured both environmental and social information,
which considered the amount of time that a regular stake-
while 16 % assured only environmental issues; holder would use to locate social and environmental
• Different methodology 24 % of the assurers followed
information of interest. The time limit used in this study
the AA1000AS, 18 % followed international standards,
was 40 min per website.
15 % followed local standards and 42 % did not
For the sustainability report analyses, this study con-
indicate the framework used; and
sidered only reports issued by corporate, holding or global
• Different assurance statement 74 % provided a positive
organizations' representatives. Reports issued by affiliates
assurance statement, 17 % provided a negative assur-
or controlled organizations were not considered. A list of
ance statement and 9 % provided a hybrid statement
criteria was also established to standardise the sample. To
(positive and negative aspects combined).
be included in the sample, websites were required to meet
the
Romero et al. (2010) reviewing assurance statements offollowing criteria:
Spanish organizations, found that larger and listed orga-
• Contained information about the organization's social
nizations commissioned higher quality assurance state-
and environmental performance;
ments and assurance statements issued by accountants are
• Provided information in the English language; and
perceived to be higher quality than those issued by non-
• Provided information regarding the organization's
accountants.
performance in 2010.
Manetti and Becatti (2009) investigated 34 selected
This study considered all types of sustainability report,
assurance statements on sustainability reports developed
according to the GRI guidelines, issued in 2006. regardless
They of the report title adopted (Environmental and
found that national recommendations have brought Social Report, Sustainability Report, Ethical Report, etc.).
inno-
Regarding
vative elements to sustainability reports that are not always integrated reports, this study used the same

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 Sustainability Reporting and Assurance 5

approach adopted by
order toKolk
meet stakeholders'(2008), where
expectations. All organizations the
process has been counted only
in the sample published if
some type of this
information related towas appl
cally to the environmental and/or
sustainability social performance on their official This
information. stu
assurance of website. The percentage
sustainability of companies which publish
reports social
regardless o
of assurance services and/or environmental information
provided and/or on their websites has
type of i
third party opinions issued.
increased when comparedThe scope
with a previous of
similar study th
process and type conductedassurance
theof by Rikhardsson et al. (2002), using the G500 list
statement pr
not analysed. Some in 2000 (social information 63 %, environmental
sustainability reports infor- cont
sures that an mation 79 %, and
assurance both social and environmental
service wasinfor- perform
identity of the mation 55 %). provider,
assurance This increase in social and/or
butenvironmental
did not
respective assurance statement.
reporting In
demonstrates that the Internet is anthese
effective situ
sustainability reportmechanism
analysed was
for such reporting considered
(Rikhardsson et al. 2002). a
the type of assurance Figure
provider was
1 presents a chronological included
evolution of the per- in
Sixteen centage
organizations of organizations
were issuing a sustainability
excluded report,
from the
for the following comparing results from this study and from previous
reasons:
studies (Kolk 2008; 2010; KPMG Global Sustainability
• Thirteen organizations did not provide in
Services 2008; Rikhardsson et al. 2002). This study found
regarding sustainability reporting in their off
that 85 % of the sample issued a sustainability report, much
site in the English language;
higher than the 47 % reported by Rikhardsson et al. (2002)
• One organization did not provide its sust
(24 % issued a specific environmental report, 18 % an
report in the English
language;
integrated report containing environmental and social
• One organization's official website was n
information, 3 % issued both, an environmental and a
during the data collection phase; and
social report and 2 % issued a specific social report).
• One organization did not issue a corporat
Considering just the top 250 of the sample analysed, the
company or global report.
In this situation, only
percentage of organizations which issued a sustainability
and controlled organizations issued a sustainabil
report is even higher at 93 %. Even though some authors
and these reports were not considered in this an
argue that current sustainability reporting processes need
Excluding the exceptions
improvement andlisted
could not haveabove, the sam
been achieving their
composed of 484 organizations. Rikhardsson
purpose (Laufer 2003; Moneva et al. 2006; Ramus and
identified similar Montiel 2005), a growing
exceptions in number of organizations are
a previous stud
All information obtained
issuing this typefrom
of report. the organization
website and from their
Showingrespective sustainabili
an analysis by country, Fig. 2 presents the
were consolidated percentage
and then of organizations in the sample which have
a descriptive statist
was conducted.
statistical The
analysis
issued a sustainability report. provides
Previous studies have con-
of (a)
proportion theof
sidered organizations
Japan and European countries more active in providin
sus-
environmental information on
tainability reporting than othertheir websites,
developed countries such as
portion of organizations issuing
United States, Canada, and Australia; andsustainabili
some emerging
(c) the proportion ofeconomies such as Brazil, China, India and
organizations Russia (Kolk
assuring th
ability reports, and (d) the
2010; KPMG type
Global of
Sustainability assurer
Services 2008). Fig- used
are first presented ure 2 demonstrates that China
for the full sample and by c and South Korea have not
Previous studies have analysed
achieved the reporting
the high level of sustainability performan
already
organizations listed on
reached the G500,
by other countries. but
High levels considere
of sustainability
top 250 organizations (Kolk
reporting 2010;
are also evident KPMG
among some emerging econo- Glo
ability Services 2008). Rikhardsson
mies, especially et coun-
India and Brazil, some developed al. (20
all 500 organizations, and
tries this and
such as Australia is the
United approach
States, especially
this study to permit Australia
comparisons with all prior
which shares the highest level of the countries
presented in Fig. 2 with Austria, Belgium, India, and
Findings Sweden.

Of the top five countries with the largest number of

Sustainability Reporting organizations in the G500 list (U.S., Japan, China, France
and Germany) which together represent 66 % of the total,
organizations have been disclosing their social and envi- Japan achieved the highest percentage of organizations
ronmental performance through sustainability reports in issuing a sustainability report, followed by U.S., France

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 6 R. M. Junior et al.

Fig. 1 Percentage of o

and Globaltha
Germany Su
achieved 2008;
the Park
lowes
The propose
increase in th
th
of service
sustainability repor
that this is not
respectivea
providers
occurring in deve
the Owen
world. et a
Results f
organizati
Assurance of Susta
are simila
Some Sustainabi
authors argu
indicates
contributes tow
improving centage of
interna
with
tainability diffe
reports;
Figure
transparent and 3 i
cr
Swift the Fédéra
2003; propo
2003; ability
Global re
Repo
growing
Sustainability Sern

Fig. 2 Percentage of
organizations in the Fo
Global 500 in 2010 which
provided a sustainability report,
analysed by country. The
number of organizations
analysed in each country is
presented in parentheses

* This figure presents just countries which have more than two organisations providing a sustainability report.

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 Sustainability Reporting and Assurance 7

Fig. 3 Percentage of organizations which have issued a

reports. There appearsTheto be

first is little
an independent thirdgrowth
party review, whichin
is th
value of assurance. performed by a different range of entities or individuals
such as stakeholder panels, academic institutions, non-
Considering percentage by countries, Fig. 4 indicates
that Australia, Spain, Netherlands, Italy, Brazil, Britain,governmental organizations, and presidents/directors of
Sweden, and Japan achieved higher percentage levels international
of institutes operating in the sustainability
reports assured (more than 50 %). Most of the countries in
reporting area. The assurance statement provided by this
this group are developed and European countries. There are
specific third party review practice was referred by the
organizations in most of their sustainability reports as a
just three exceptions. The first is a non-developed and non-
European country, where Brazil achieved the 5th place
"Third Party Comment" or a "Third Party Review". This
with 63 % of the sustainability reports assured. Secondly,
study refers to this specific third party review practice as a
Australia, a developed non-European country achieved the"Stakeholder or Specialist Review". This term was chosen
because most of the cases identified in this situation were
best performance, with all sustainability reports assured.
Third Japan, a developed non-European country achieved performed by a stakeholder panel or by a specialist indi-
52 %. In relation to the lower percentage, Austria, Southvidual. In addition, most of the current literature does not
Korea, Taiwan, Canada, Belgium, China and U.S. achievedmention this specific practice, or when mentioned, it pro-
less than 35 % of the reports assured. In this group there
vides a definition that does not fully describe the situation
are developed and emerging economies representativesidentified in this study.6
from Asia, Europe, and North America. Assurance statements provided by this specific third
According to previous studies, external assurance party
is review practice do not share the features of assurance
most prevalent in Japan and Europe and not common in the
statements issued by accounting and non-accounting firms
U.S. (Kolk 2008; Kolk and Perego 2010). What is new and in they usually contain just opinions and/or recommen-
dations from the entities or individuals invited to review
this study is the percentage of sustainability reports assured
in other countries, especially Australia and Brazil. Aus-
the organizations' sustainability reports. These reviews are
tralia achieved the highest percentage of the sample andguided only orientated by the assurer's experiences and
Brazil overtook Japan and most of the European countries.
expertise, not by a standard methodology.
Although these statements provide an independent
Assurance Providers
opinion about the quality of the sustainability report pub-
lished, and in some cases, recommendations to improve the
quality of the sustainability report, they do not evaluate or
Previous studies have presented information about two
types of assurance practices provided by accounting and
non-accounting firms. This study identified two further
6 KPMG (2008) have used the term "not professional assurance
types of assurance practices. providers" to refer to this specific group.

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 8 R. M. Junior et al.

Fig. 4 Percentage of
sustainability reports a
country of the organi
included at the Fortune Global
list in 2010

* This Figure presents just countries which have more than two organisations in the sample providing a formal sustainability report.

assure any information included in the sustainabilityand by Frost and Martino v-Bennie (2010) in Australia,
reports. Accordingly, they provide no assurance. where the majority of the engagements were provided by
The second new category of assurance practice is non-accounting firms.
referred to in this study as a "Mixed Approach". The Contrary to the findings of Mock et al. (2007), the
mixed approach uses two different types of assuranceresults from this study indicate that accounting firms
providers in the same sustainability report (an accountingdominate the assurance market, similar to the results pre-
sented
firm combined with a non-accounting firm or an accounting by Simnett et al. (2009), KPMG (2008), Kolk
firm combined with a stakeholder or specialist review).(2010), Manetti and Becatti (2009), and Kolk (2008).
Each assurance provider works in a specific area of the
report and issues a specific statement, and both statementsDiscussion and Conclusions
are provided in the organization's sustainability report.
Regarding the four different types of assurance practicesThis study demonstrates that organizations worldwide are
presented (accounting firms, non-accounting firms, stake-using sustainability reports to provide accountability about
holder or specialist review and mixed approach), this studytheir environmental and social performance independent of
their geographic location and the level of economic
found that 56 % of the statements issued in the sample
were provided by accounting firms, 26 % by non- development of their country. Even though the level, shape,
accounting firms, 16 % by stakeholder or specialist
quality and integrity of the information presented by
reviewers, and 2 % employed a mixed approach. organizations could change significantly worldwide, it is
Figure 5 summarises the type of assurance practicesclear that sustainability reports have been used as an
used by organizations in the sample by country. It isimportant tool to provide communication between organi-
noticeable that stakeholder or specialist reviews were usedzations and their stakeholders. Also, sustainability reports,
by organizations in Japan, China and South Korea, with if used adequately, could work towards to the GRI's pur-
Japan responsible for 92 % of these cases. The mixedpose for this type of reports (Global Reporting Initiative
approach was used only in Spain and Japan, and this 2011, p. 3), which is being accountable to internal and
external stakeholders for organizational performance
practice represented almost a third of all sustainability
reports issued with an assurance statement in Spain. towards the goal of sustainable development.
Non-accounting firms have dominance in the sustain- This study found that the number of organizations in
ability assurance market in Taiwan, U.S, India, Australia, Global Fortune lists issuing a sustainability report has been
and China, while accounting firms perform most assuranceincreasing steadily over the past decade. However, the
engagements in European countries and in Canada, Brazil proportion of sustainability reports which have been
and Russia. assured has not increased significantly, indicating little
This study achieved similar results to those presented change
by in the perceived value of assurance processes.
Romero et al. (2010) in Spain, where the majority of the The increase in the number of sustainability reports
assurance engagements were provided by accounting firms, issued could be related to the society's increased awareness

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 Sustainability Reporting and Assurance 9

Fig. 5 Type of assurance provider by country for org

of environmental and social issues, and this awareness mixed approach), which could be the result of some
results in demand for more accountability about organiza- organizations' attempts to improve the current assurance
tions' environmental and social performance. Sustainabil- process. This could be associated with dissatisfaction with
ity reporting has also become a compulsory activity in assurance processes provided by accounting and non-
some countries, which could work towards increasing the accounting firms, which may be too limited in scope.
number of organizations which issued a sustainability Alternatively, since assurance of sustainability reports is
report. still not regulated in the majority of countries, organiza-
It is important to highlight that an increase in number tions could be seeking just a statement to be included in
does not mean an increase in quality. In order to achieve their sustainability reports regardless of the quality of the
transparency about their performance, organizations should assurance process performed.
provide information regarding some fundamental aspects In order to improve transparency for sustainability
of their sustainability reporting process, such as: identifi- reports, the current assurance process must first be trans-
cation and engagement with stakeholders, identification parent in itself. Full versions of the assurance statements
and response to stakeholders, reporting of material issues, with detailed information about the work carried out,
balance of information considering positive and negative scope, results obtained, and recommendations must be
aspects and accountability for all key issues identified. available, explicit and understandable to stakeholders.
There is no observable increase in the adoption of assur- Without a high level of transparency the assurance process
ance engagements amongst organizations in the sample. for sustainability reports could be considered just a
There are still some questions in the current literature about bureaucratic and non-important activity. In addition,
the real benefits of the assurance process as it is currently readers of sustainability reports may not be aware of the
being provided. Some academics have strongly questioned different scopes and methodologies of the assurance pro-
the efficacy of the current assurance process in enhancing viders. Realising these differences is very important to
transparency and accountability to key stakeholder groups. understand exactly how much information in the sustain-
The lack of specific regulation about the assurance process ability report is being verified by an independent third
for sustainability reports and the differences among assur- party.
ance services provided by different assurance providers The results presented in this study must be moderated by
could be contributing to these uncertainties. the following limitations. There are significant differences
This study identified two new observable types of in the number of organizations in each of the countries
assurance practice (stakeholder or specialist reviews, and analysed, and this may affect the results presented in

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 10 R. M. Junior et al.

Fédération des Experts form.

percentage Comptables Européens. (2006). lAASB A
websitesconsultation were paper on assurance aspects of G3 - The global
com
reporting initiative's 2006 draft sustainability reporting guide-
results obtained
lines , Bruxelles. in t
mation provided
Frost, G., & Martinov-Bennie, N. (2010). Sustainability reporting t
websites. assurance : Market trends and information content. Victoria:
CPA Australia Ltd.
Explanations for the findings were not part of the study's
Futerra Sustainability Communications, SustainAbility & KPMG
scope. However, discussions and suggestions for future Global Sustainability Services. (2010). Reporting Change:
studies were presented in this last section. Readers & Reporters Survey 2010.
It is important to highlight that the scope, content, Global Reporting Initiative. (2002). Sustainability reporting guide-
lines , Boston.
quality and outcomes of the sustainability reports and the
Global Reporting Initiative. (2011). Sustainability reporting guide-
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contribute to future investigations in sustainability report- sustainability reports: Impact on report users' confidence and
perceptions of information credibility. Australian Accounting
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studies on the following issues: (1) the motivations and 3000 (Revised), Assurance engagements other than audits or
reviews of historical financial information.
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