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D6: Verification and Assurance

CERES ROADMAP EXPECTATION
Companies will verify key sustainability performance data to ensure valid results and will have their disclosures reviewed by an independent, credible third party.
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Check out the Roadmap in Action section for examples of how companies are implementing the Disclosure expectations of the Ceres Roadmap.
All publicly traded U.S. companies are required to have their financial statements independently audited to the internationally respected GAAP standard. The purpose of the independent audit is to assure shareholders that the company has accurately communicated its position and performance for the reporting period. ESG performance data is vulnerable to the same (if not greater) misrepresentation as financial performance data; thus, it should be similarly verified by an independent third-party and to an internationally respected standard.

HOW ARE COMPANIES PERFORMING?


In The Road to 2020: Corporate Progress on The Ceres Roadmap For Sustainability, we evaluated 600 of the largest U.S. companies on their progress towards meeting the expectations laid forth in The Ceres Roadmap for Sustainability.  Using data compiled and analyzed by Sustainalytics, for this expectation we assessed whether a company’s disclosure was externally verified and if the company verified its report to an internally recognized standard.

Tier description - 3Only six percent (37) of the 600 companies fall into Tiers 1 or 2, and only 1.5 percent (nine companies) were included in Tier 1 for verifying their disclosure to an internationally respected standard, such as International Standard on Assurance Engagements (ISAE) 3000 or AccountAbility (AA) 1000 Assurance Standard.2 For example, Kraft Foods’ 2010 sustainability report is externally verified by Environmental Resources Management, according to AA 1000.

As companies move toward integrating sustainability data within their financial filings, many will likely use the same auditor for both their financial filings and sustainability reporting. This not only capitalizes on natural synergies and creates cost efficiencies, but also formalizes the importance of sustainability reporting internally by giving it similar weighting as financial data. UPS uses Deloitte to audit both its financial and sustainability reporting. The company reports that this alignment allows its CSR team to build the internal business case for sustainability. Similarly, Alcoa uses PriceWaterhouseCoopers to audit both CSR reporting and financial filings.

PERFORMANCE

Click on a performance tier to view more information.

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[23] Companies in Mediocre in 2012