Firms not validating sustainability data
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Fewer than 25% of the FTSE350 are having the sustainability information they publish independently assured, with uptake hampered by variations in the quality of audits, says consultancy Carbon Smart
In its fourth annual analysis of assurance statements in FTSE350 companies’ sustainability reports, Carbon Smart reveals that, while declarations are becoming clearer on what has been assured and how, many are failing to describe the competency and independence of the assurer.
Carbon Smart reports that just 70 of FTSE350 companies publish assurance statements alongside their sustainability data. And, of those, 20% cannot claim to be independent, and 50% fail to list the professional qualifications of the assurance provider, according to the consultancy.
Furthermore, only 3% of statements offered a “reasonable or high level of assurance” of the data verified and are able to state that the information is accurate, reliable and free from mistakes.
“The lack of regulation and array of approaches to assurance makes it all the more important for assurance providers to state their competence, knowledge and experience,” states the report.
“While professional qualifications aren’t listed and the independence of the assurer is not explicitly declared, the value in seeking third party [verification] is limited.”
The consultancy, which scored the sustainability assurance statements against 15 criteria, including level of assurance and use of a recognised methodology, concludes that the variation in quality is impacting on stakeholders’ confidence and as a result is a “significant barrier” to uptake.
It found that firms were reporting emissions and intensity ratios in a myriad of ways, making comparison of performance very difficult. Of those examined: 12% reported emissions per £ of revenue; 12% per unit of output; 7% per full-time employee; and 5% per floor area.
Almost half (47%) did not include a metric explaining how they had calculated their intensity figure at all.
Carbon Smart concludes that the variation in approaches could have a significant impact on the value of forcing firms to report on their emissions through mandatory greenhouse-gas reporting.
“There is clearly no one-size-fits-all carbon intensity metric,” states the report. “However, there is great value in comparable companies using consistent metrics.
“These are leading publically-listed multinationals that take their carbon footprints seriously enough to have them assured. If the data from these companies cannot be robustly compared, then carbon reporting has a long way to go before we can really who is doing well.”
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