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AICPA: ESG Engagements Grow

The percentage of companies seeking independent assurance on their environmental, social and governance  information grew to 58 percent 2020,  rising from 51 percent the prior year. That was the top finding of a study from the International Federation of Accountants , American Institute of CPAs  and Chartered Institute of Management Accountants.

A follow-up study showing 2021 data will be released later. The recently released conclusions incorporate data from 1,400 global companies from the G20 nations plus Hong Kong S.A.R., China and Singapore. 2 percent. 

While audit firms represent 63 percent of those hired for these engagements, most are performed by businesses outside of the accounting profession in countries including South Korea, the United Kingdom and the United States, most assurance engagements are conducted by service providers outside of the accountancy profession.

The countries with the highest rates of accounting firms performing the services include Australia, France, Italy, Germany and Spain

Among other findings was that 89 percent of companies presented at least some information in each of four categories: greenhouse gasses, other environmental factors, social and governance. However,  only 4 percent provided assurance for all four categories, with greenhouse gases the most common in 95 percent of engagements.

The study found use of, or reference to, Sustainability Accounting Standards Board (SASB) standards more than doubled in 2020. It notes new disclosure proposals from the International Sustainability Standards Board (ISSB) include and build upon SASB standards. (SASB’s parent organization, the Value Reporting Foundation, consolidated into the IFRS Foundation on this month.

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