Corporate Sustainability Reporting (CSR) began over 25 years ago with the Global Report Initiative (GRI). Since then, use of CSR information by investors and potential customers has increased. Unlike financial reporting, the accuracy and truthfulness of sustainability information has been mostly unregulated leading to abundant misstatements aka, greenwash in CSR and other sustainability reports. Stakeholders, including investors, customers and others are increasingly requesting robust qualitative and quantitative sustainability data and information to base their economic decisions on. These stakeholders are looking for assurance from competent providers to help them confirm the information they are using is true. Assurance service providers now have several protocol they can follow when verifying sustainability information.
The following is a brief description of some of the protocol being developed to perform assurance of sustainability information.
ISO 14019 Series – Validation and Verification of Sustainability Information
ISO is developing standards in the ISO 14019 series titled Validation and Verification of Sustainability Information. This series is designed to cover all types of sustainability information including Environmental, Social and Governance (ESG). Green house gas emission information is one example of the types of information these standards will cover. Other types of information will include information and claims about:
- amount of waste sent to a landfill,
- water the organizations uses and discharges as waste water.
- emission of other toxic pollutant to the atmosphere,
- assertions about occupational health and safety performance.
The series will include:
14019-1 General principles and requirements for validation and verification
14019-2 Principles and requirements for verification processes
14019-3 Principles and requirements for validation processes
14019-4 Principles and requirements for bodies validating and verifying sustainability information.
The United States Security and Exchange Commission (SEC)
Recently the SEC took action against organizations using misleading sustainability information to market their financial products. SEC is also enhancing its authority to further regulate misstatements with issuance of the long anticipated Climate Disclosure Rule. The SEC climate disclosure rule issued now include requiring verification of GHG information by an independent verification service provider.
International Audit and Assurance Standards Board (IAASB)
IAASB is also about to issue standards that will cover assurance of all types of sustainability information. ISSA 5000 is titled General Requirements for Sustainability Assurance Engagements. This protocol will likely be preferred by Certified Public Account firms because this protocell has been developed largely by the financial accounting profession.
What’s Next?
There are many questions about which if any of these new verification standards will be broadly accepted and by whom. ISO 14019 series may be more acceptable to non-CPAs including sustainability consultants. Other questions include who, if anyone will accredit the assurance bodies. This field of practice is developing quickly so stay tuned. We should have answers to these questions soon. If you have any questions contact us here.
Kevin Lehner is the Chair of the US Technical Advisory Group Sub TAG that is developing the ISO 14019 series. He is also the Vice Chair of the US Technical Advisory Group to TC 283 and represents the American National Standards Group international for the development of ISO 45000 series of standards on occupational health and safety. His practice includes performing certification audits, training auditors and help organizations integrate ISO 14001 and 45001 into their other business management systems.