Unassured and fed up

I read many sustainability reports, and  many assurance statements. Today, i lost my rag. (I was cleaning the kitchen) The quality of sustainability report assurance is abysmal, on the whole. So many Companies taking good money to provide what should be a seal of quality on  sustainability reports offering not much more than a page of printed hot-air seems to me to be highly irresponsible. Maybe assurance assignments are easy money. Maybe they are not as sexy as reporting assignments. Maybe the providers just dont have the skills, or are not willing to guarantee the quality of their auditing work for fear of liability. Maybe someone might actually make a decision based on the quality of the assurance? What a disaster! Whatever the reason, assurance is just not making the grade. And worse, the Global Reporting Initiative, in awarding a "+" at each Application Level, without checking the quality, for so-called  assured reports, unwittingly perhaps, is complicit in this devaluation of the assurance process. So I took pen to paper (fingers to keyboard) and sent a letter to the CEO of the GRI. Here it is: 

Sunday ,6th December 2009

For the Attention of:
Mr Ernst Ligteringen
CEO
The Global Reporting Initiative
 
Dear Ernst, 
Quality of Sustainability Report Assurance Practices and Allocation of “+” in the GRI Report Check
As you may know, my business in Israel, BeyondBusiness Ltd, is a strong supporter of the GRI, and we are Organizational Stakeholders. We provide sustainability reporting services to a range of clients, who we always encourage to report against the GRI framework. My business partner, Liad Ortar, was the one who took the initiative to translate the GRI Framework into Hebrew back in 2006, creating greater accessibility for local Companies and paving the way for GRI reporting in Israel. In fact, we wrote the first GRI (Application Level B) report in Israel for Bank Leumi together with their team, the first GRI report at application level A for comme il faut, a private fashion Company, and now we are working on the first GRI report for a non-profit in Israel. In between, we have written several other GRI reports. We like the GRI framework and apply it for all types of organizations in all sectors. Of course, there are elements which could be improved in the future, but overall, we are strong advocates. In addition, we always encourage our clients to have their report checked by the GRI, to ensure confirmation of proper adherence to the guidelines.

There is one area, however, where I feel the GRI does not do justice to the reporting process, and this relates to Assurance. The role of Assurance is to enhance credibility and trust in the report, as a promise to stakeholders that the report has been independently, externally verified by a qualified expert, or group of experts, both in terms of the accuracy of content and the relevance of material issues, and in terms of the fair and balanced representation of the overall content. In checking reports, for the award of a “+” Application Level, the GRI checks only the presence of an Assurance Statement, not the quality of the content or the appropriateness of the assurer. The "+" award provides a benefit for Companies, as the “+” tends to promote the assumption that the GRI confirms that the Assurance Statement achieves the appropriate quality of verification, as per the GRI guidelines. Companies who publish an A+, B+ or C+ report indicate by definition that their report has adhered to these standards.

I read, write and regularly review reports. My reviews are published on www.CorporateRegister.com/reviews for all to view. In performing such reviews, I try to assess whether the report presents a credible and trustworthy picture of the organization’s Corporate Responsibility activities. Of course, I always read the Assurance Statement, if there is one.

And now to the crux of my message.
In many cases, the Assurance Statement seriously lacks the ability to assure.

• Often the statement is a partial assurance of only a very small sample of the report – for example – the carbon emissions.
• Often the statement fails to give reasonable evidence that the Assurance Provider has done the rigorous work required to draw a conclusion about the quality and material relevance of the report.
• In many cases, the Assurance Statement is signed off by a Company and it is not known who actually did the Assurance work. In one currently “featured” report, the name of the Assurer is not legible.  
• In other cases, the Assurance statement is largely a reprint of the prior year’s statement.
• I have seen one report where the Assurer was the very same consultant who supported the entire development and writing of the report, which is a serious breach of the assurance “quality standards” that require the Assurer to be a party “not unduly limited by their relationship with the organization or its stakeholders.”
• One report, which is a currently GRI “featured report” is an integrated report and contains only an audit of the financial statements, and no verification of the sustainability content, as far as I can see.
• And it is almost never clear what changes have been made to the report content prior to publishing as a result of the Assurer’s intervention.

And yet, the GRI automatically awards a “+” for all Assurance Statements, just because the Reporter shows they exist. This, in my view, undermines the contribution of the assurance process and devalues the GRI check.

I suggest the GRI should take a stronger stand on the subject of assurance, and that the GRI should check that:

1. The Assurer is external to the reporting organization and not  engaged in any other form of service provision with the Reporting Company for at least 12 months prior to providing assurance.
2. The Assurer has relevant experience of corporate responsibility practices qualifies him or her to do the work, and signs the Statement in his or her name.
3. The Assurance Statement relates to the entire content of the report, disclosing the detailed methodology used.
4. The Assurance Statement makes reference to specific core material issues and whether the reporting Company has addressed these in the report
5. The Assurance Statement gives positive confirmation, and not a statement of several negatives that confirm only that the Assurer has not noticed inconsistencies or errors, but has positively done the work to conclude that the content is accurate and relevant.

Anything less, should not deserve a "+".

In a review of several of the current featured reports on the GRI Website, I find that adherence to the above criteria is low. Few of the statements I reviewed suggest a professional and quality approach to assurance, and the GRI approach seems to condone this.

I would like to recommend, that the GRI adopts a new policy to read and check Assurance Statements, and award “+” only if the Assurance Statement and the Assurer meet the above criteria.

This does not preclude a Company including a consultant’s statement, or opinions of experts relating to part or all of the report. This is often a nice touch, and adds value, but it does not carry the validity of a formal Assurance Statement which earns the Company the highest level of adherence to the GRI Framework with a “+” designation.

I would be grateful if the GRI would consider this recommendation and a possible change to its practice with regard to the checking of assured reports in the future. I send you this letter as an open letter, which I plan to publish simultaneously on my Reporting Blog , in the hope that it will generate some discussion from other reporting professionals as you consider this recommendation.

Thank you for reading this letter, and for all the GRI does to promote sustainability.
I look forward to hearing from you 

Warm regards,

Chunky Monkey Me Elaine 

 *********************

That was the letter. I don't expect that the GRI response will be an ethusiastic YES OF COURSE, though i do believe the GRI, as a multi-stakeholder organization, will be receptive to feedback, and hope this will be taken in good spirit. Whatever the response, I could not remain passive on this issue, which irks me time and time again every day as I dip in to some report or other.
By the way, the report mentioned above which has an assurance statement signed illegibly - well, see what you can make of this

Maybe it was written by an alien ?

CorporateRegister.com produced a good report about  Assurance approaches in July 2008 called AssureView.This report discusses quite well the difficultues of assurance including the fact that there is no "common currency" or accepted methodology of performing assurance of non-financial data. The conclusion hits the nail on the head:

So what do you think ? Am i unassured and fed up all alone ? Should the GRI change its policy? Do you read and believe Assurance Statements ? And how important is all of this?

elaine cohen is the joint CEO of BeyondBusiness, a leading reporting and social-environmental consulting firm . Visit our website at: www.b-yond.biz/en