Opportunities for Companies:
The purpose of encouraging a third-party quality assurance is to improve the credibility of ESG reports, bridge the gap between issuers and stakeholders in mutual trust, and increase the availability of information disclosed. The information disclosed about an enterprise’s sustainable development encompasses a series of quantitative and qualitative performance, which are usually not measured in monetary units. Therefore, their accuracy and representativeness without verification can hardly be guaranteed. With the application of systemic assurance standards, enterprises can achieve:
Increased recognition and credibility; Reduced data quality risks and the opening of a new era of report value management; Improved board and management level involvement; Strengthened internal reporting and management systems; Improved stakeholder communication that facilitates issuers per se a better understanding of national strategy, social needs, positioning in the industry and the company’s original intentions.
Challenges & Solutions for Directors:
The primary barriers impeding issuers from seeking a third-party assurance in the future during the preparation of ESG reports are cost and uneven levels of assurance by verifiers. GreenCo suggests that enterprises familiarise themselves with internationally accepted standards for assurance that are suitable to their industries in the first place before performing evaluations of the professional background and service process of independent verifiers and making appropriate arrangements. Moreover, enterprises should build a diligent and efficient working team that takes initiatives to gather information and make contact with external parties, while providing a sound working environment and technical support to third-party verifiers.