error
Subscriptions are not available for this site while you are logged into your current account.
close
Skip to main content
Submit RFP

      Assurance in the context of ESG matters is crucial for organizations. It enables investors, customers and other users of sustainability reports to make informed decisions based on the assured subject matter with a degree of confidence while also ensuring a level of transparency and credibility.

      There are two levels of Assurance: Limited and Reasonable. The key difference lies in the level of confidence that a reader can take from the report.

      Reasonable Assurance is the equivalent to an audit opinion over financial information. These reports are provided in a positive manner, that the non-financial disclosures are materially accurate and provides users of sustainability information with high confidence. Broadly only the most mature sustainability reporting companies are obtaining reasonable assurance. This level of assurance is a big step up from limited assurance and so ensuring that companies have the right foundations before moving to reasonable assurance is key.

      Limited Assurance, on the other hand, provides a range of confidence that is less than Reasonable but more than inconsequential or trivial. It follows the same methods as Reasonable Assurance but is not as comprehensive in nature, timing, and extent of procedures.

      Joshua Olomolaiye
      Joshua Olomolaiye

      Director, ESG Reporting and Assurance

      KPMG in the UK

      Some key differences we see between procedures under limited vs reasonable assurance are as follows;

      • Under reasonable assurance your assurance provider may test the design and implementation of controls over significant risks. They may also test the operating effectiveness of controls. This is rarely the case under limited assurance.
      • With regards to sample size, we typically see a smaller sample size under limited assurance and a more extensive selection under reasonable.
      • Under limited assurance the procedures performed may include inquiries, analytical procedures and more limited sample testing whereas under reasonable assurance there will be more in-depth procedures including substantive testing.

      Limited assurance is absolutely still the norm in the sustainability assurance space at present, per KPMG research over the sustainability reporting of FTSE 100 companies we have seen that ESG assurance is solely to the limited level for 88% of companies who obtain ESG assurance. As Sustainability and ESG assurance has started to be mandated across global jurisdictions, whether this is limited assurance for those subjected to the Corporate Sustainability Reporting Directive (CSRD) in the EU, or limited assurance moving to reasonable for countries such as Australia and their local adoption of the International Sustainability Standards Board (ISSB)’s Sustainability Reporting Standard (SRS).

      Compared to financial information, the market and appetite for Sustainability information remains immature, however the requirement for this data is only increasing, and the question to be asked is as users require more investor grade information will sustainability information require reasonable assurance?

      If you disclose Sustainability or ESG data publicly and would like more information on assurance and how this can increase confidence and transparency in your disclosure then please contact our experts Josh Olomolaiye and Tom Arnold to arrange a conversation.

      Our audit insights

      Something went wrong

      Oops!! Something went wrong, please try again