The role that external assurance has played within non financial reporting has evolved significantly over the last two decades.
When BT published its first environment report it chose to have it assured by its own Environment Liaison Panel. However, as the status of non-financial reporting rose up the corporate and governmental agenda, BT were quick to realise the value that external verification could bring and so became an early adopter of independent assurance.
In 1998, BT chose Lloyd’s Register Quality Assurance (LRQA), its existing management systems certifier to carry out assurance of its Report against the criteria of the voluntary reporting standard, AA1000 (AS).
Ian Wood comments. “We know reports that are independently verified are more trusted than those which are not and there are statistics available that support this. The rigour of the assurance process adds credibility and gives additional stakeholder confidence – our customers, investors, government, regulators and wider society. Ultimately, it is about trust and reputation.
“A very tangible commercial benefit we have seen directly from having our ‘Better Future’ report assured by LRQA is the ease with which we can now respond to tenders and ratings requests. When it comes to answering questions about our policies and performance, instead of spending a few days gathering the information around the business, we already have everything we need at our fingertips, and it’s been verified which provides additional reassurance.
“Our report is seen as a single source of facts and figures that our colleagues from around the business can turn to, so avoiding any contradictory information being placed in the marketplace.
“Additionally, we felt it important to benchmark against recognised criteria. There is really only one non-financial reporting standard that we felt appropriate which was the AA1000 Assurance Standard. This offers a standardised approach allowing readers to more easily compare and contrast with our own previous reports and also those from other organisations that choose to use the same standard,” comments Ian Wood.
Indeed, BT and LRQA were part of the working group that helped develop the first version of AA1000 (AS) published in 2003.
This voluntary standard gives a framework for assurors to evaluate the nature and extent to which a business adheres to the AccountAbility Principles of Inclusivity, Materiality and Responsiveness.
Technical experts from LRQA were involved in helping develop the principles of the Standard. This input has enabled LRQA assurors to give a practical interpretation of the standards based on extensive technical expertise combined with business systems knowledge.
LRQA’s Lead Assessor Ged Farmer comments: “The thrust of the AA1000 Assurance Standard is so much more than simply issuing a report but a commentary on how well an organisation has embedded corporate sustainability issues within the overall framework of their business.”