The state of sustainability reporting assurance in the United Kingdom: perspectives of assurance providers and stakeholders

Sustainability reporting assurance is considered as a practice that enhances the credibility and quality of reported information (Dando and Swift, 2003; ACCA, 2004). However, studies have found significant variances and inconsistencies that exist across assurance statements but little attention has been paid to understanding more about the nature of the variances beyond the examination of assurance statements. The apparent variances affect the ability of sustainability assurance to deliver robust levels of stakeholder accountability; as such a detailed exploration behind the dynamics of stakeholder consideration in the practice is required. Hence, this study presents an updated and expanded assessment of sustainability reporting assurance practices by adopting a three-stage mixed methods investigative approach.
The first stage is a content analysis of assurance statements published by FTSE350 companies using a specifically developed evaluation template. Core elements such as scope of assurance, level of assurance, addresses, guidelines used, independence of assurance providers, assurance work undertaken, stakeholder consideration and conclusions were of particular focus. Data obtained on these elements were explored further in the subsequent stages of the study. The second stage involved semi-structured interviews with 13 assurance providers focusing on their roles in the process and the apparent variances that appear in assurance statements. The third stage is comprised of further semi-structured interviews with representatives of 11 different stakeholders. All data generated were analysed and interpreted through the audit theoretical conception by Power (1991, 1994, 1999) as well as the legitimacy, institutional and stakeholder theories.
Sustainability reporting assurance remains largely a valuable practice but there is a fundamental absence of consistent and comprehensive shared meaning and approach on the practice. This has manifested in the different application of sustainability assurance processes thus making it challenging for a single approach to be generally accepted. Also, considerable evidence of managerial capture was observed as assurance providers confirmed the vast degree of influence exerted by reporting companies in assurance processes, an issue that no direct solution or effort was acknowledged to assist in alleviating. The presence of a sustainability assurance expectations gap serves as a key factor that drives the severe caution expressed by stakeholders about the practice. The lack of stakeholder influence was apparent, thus limiting their ability to put companies and assurance providers under pressure towards a more stakeholder oriented provision of sustainability assurance. In general, the findings of this study call into question the ability of the current state of sustainability reporting assurance to enhance transparency and hence discharge effective corporate accountability to stakeholders.