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New IFAC Study Expands Insights into Sustainability Disclosure and Assurance Beyond the G20

Data from the Global South Demonstrates Need for ISSB Global Baseline Disclosure Requirements as Well as Broader Scope Assurance

Sep 20, 2023 | New York, New York | English

Fresh research from the International Federation of Accountants (IFAC) expands its sustainability disclosure and assurance data to 20 additional jurisdictions beyond the G20 previously reported on. The new report, The State of Play: Beyond the G20, focuses on the Global South with data from three jurisdictions from Latin America, six in Africa and Middle East, and four in the Asia-Pacific region, as well as six smaller-sized economies within the European Economic Area and Switzerland.

IFAC CEO Kevin Dancey said, “When viewed in full, the State of Play series of reports now provide data on the current market practices of nearly 2,000 of the largest stock exchange-listed companies across forty-two jurisdictions over the period 2019 through 2021. This broader lens on disclosure and assurance makes it even more clear that we are still in the early stages of the journey to provide investors and other stakeholders with consistent, comparable, decision-useful, and assured sustainability information that is as reliable as financial information.”

While the data shows an upward trend in the incidence of assurance, the scope of assurance being obtained by companies is narrowing. Additionally, fragmentation in terms of which assurance standard is used is evident. The International Auditing and Assurance Standards Board’s recently proposed sustainability assurance standard—International Standard on Sustainability Assurance 5000—addresses both of these issues. The International Ethics Board for Accountants is also working to enhance independence and ethics requirements to support high-quality assurance.

As governments, regulators and policy makers around the world are turning their attention to new sustainability requirements, IFAC is conducting this and other research to help raise awareness about the need for high-quality sustainability information and foster evidence-based policy and regulatory decisions, both of which are aligned with its commitment to the adoption of ISSB standards and the ISSB’s Partnership Framework.

Additional Key Findings

  • 89% of companies reviewed reported some ESG information in 2021, with 48% of those companies receiving some level of assurance.
  • Sustainability disclosure—in the G20 as well as beyond the G20—is still an “alphabet soup” of standards and frameworks. However this study found more connectivity between sustainability and financial information, with only 19% of companies relying on stand-alone sustainability reports, compared to 50% for the G20 (as reported in The State of Play: Sustainability Disclosure & Assurance 2019-2021, published in partnership with AICPA-CIMA).
  • Assurance rates have risen from 37% to 48%, but engagements cover a narrowing set of topics.. Specifically, broader scope assurance has declined from 74% in 2019 to 64% of engagements in 2021.
  • Most assurance engagements were conducted by audit firms—62% of assurance engagements in 2021.
  • 81% of these assurance engagements applied the IAASB’s International Standard on Assurance Engagement 3000.

About IFAC
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 180 members and associates in more than 135 jurisdictions, representing millions of professional accountants in public practice, education, government service, industry, and commerce.