Audit Gap with Aussie Sustainability Data
Wednesday, 13th August 2014 at 11:34 am
Most Australian companies are failing to have their sustainability data assured, despite increases in reporting overall, a new Net Balance report has found.
According to Net Balance’s recently released 2013 State of Sustainability Assurance report, while financial performance data is thoroughly audited prior to release, the same rigour is not usually applied to sustainability information.
The research shows that while 75 per cent of the largest 200 companies listed on the Australian Stock Exchange (ASX200) provide some form of reporting on their sustainability performance, only 29 per cent of those companies are having data assured.
“Those companies that are having their data assured are providing their stakeholders with robust information about their sustainability performance,” Net Balance Senior Associate Nadia Woodhouse said.
“The research, which examined sustainability reports released in 2013, did find an increase in the number of companies reporting sustainability performance, something we would hope will increase given the new ASX requirement.
“We would also hope that companies see the value in providing investors and other stakeholders with assurance that their sustainability information is as transparent and robust as their financial data, rather than making assertions that may or may not be fact.”
ASX Governance Principles and Recommendations now require companies to report on Recommendation 7.4, which asks them to disclose their material exposure to economic, environmental and social sustainability risks and how they are managing those risks.
Of the 150 companies in the ASX200 providing some form of sustainability reporting, the most common format was a short section within the annual report.
The research, which compared findings with Net Balance’s 2012 State of Sustainability Assurance report, identified an emerging trend in the assurance of human rights disclosures, particularly in relation to supply chain risks.
The report said assurers were increasingly making recommendations around transparency, transitioning to more streamlined and concise reports and clear communication of outcomes, rather than prioritising improvements to data capture and reporting systems.
Read the full report here.