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CAQ Analysis: More Companies Are Seeking Assurance From Audit Firms Over ESG Data

Ruth Singleton
Published Date:
Jul 3, 2024


The Center for Audit Quality (CAQ) has released its 2024 analysis on environmental, social and governance (ESG) reporting and assurance, finding that 98 percent of S&P 500 companies reported ESG information in 2022, which is roughly consistent with the 99 percent of S&P 500 companies that did so in 2021. In addition, 70 percent of the companies that reported ESG information in 2022 obtained assurance over certain of that information (up from 65 percent in 2021). And 21 percent of companies that obtained assurance, obtained assurance from public company auditors, an increase from 18 percent in 2021.

The CAQ obtained its information by looking at ESG reports; company websites; completed Climate Change Questionnaires from the Carbon Disclosure Project (CDP), a global non-profit organization; and third-party assurance or verification reports for 2022 period end data from S&P 500 companies. Its aim was to understand what S&P500 companies disclosed about ESG reporting standards and frameworks, GHG emissions, assurance or verification over the ESG information, and net zero or carbon neutral commitments. THE CAQ compared these findings with its own findings for the 2021 and 2020 reporting periods. The CAQ's analysis does not contemplate information disclosed by companies in SEC filings.

Other key takeaways of the analysis include the following:

• Most companies are seeking assurance over their greenhouse gas (GHG) emissions, plus at least one to three other ESG metrics (as opposed to only their GHG emissions).

• Ninety-five percent of companies that obtained assurance from a public company auditor in 2022 used the same firm that performed their financial statement , an increase  from 90 percent in 2021.

• There is inconsistency in how other assurance/verification providers describe their compliance with International Auditing and Assurance Standards Board (IAASB) assurance standards, raising questions about the consistency of their compliance.

Accounting Today reported that public company auditors in the United States tended to use the AICPA’s CPAs' attestation standards for their assurance engagements. Non-U.S. based public company auditors used either the IAASB standards or the national assurance standard used in their own country. In one case, a U.S. public company auditor used both the AICPA attestation standards along with the IAASB assurance standards for an assurance engagement.

In addition, CAQ analysis found that most companies have a dedicated ESG page on their corporate investor relations website where they often disclose ESG information in a standalone PDF report. However, some companies issue ESG information in multiple separate smaller reports. Some other companies designed an ESG interface web portal to disclose their ESG information.


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