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  • Writer's pictureDaniel Goelzer

IFAC Issues Third Report on ESG Disclosure and Assurance

The International Federation of Accountants (IFAC) and the Association of International Certified Professional Accountants (Association), in partnership with Audit Analytics, have released their third annual report on global sustainability (or ESG) reporting practices. The State of Play: Sustainability Disclosure & Assurance--2019-2021 Trends & Analysis is based on a review of 1,350 companies, representing the largest companies by market capitalization in 22 jurisdictions. (Russia was not part of the most recent review, although it was included in prior studies.)


The report finds that, in 2021, 95 percent of these large companies reported on ESG. This compares to 92 percent and 91 percent ESG reporters in 2020 and 2019, respectively. In addition, 64 percent obtained third party assurance/verification over some of the ESG information they provided. This reflects an increase from 58 percent last year and 51 percent in 2019. For a summary of the prior IFAC/Association report, see IFAC Reports on the State of ESG Assurance, August 2022 Update.


Other key findings of the new report include:

  • In 2021, half of the 1,350 companies issued a stand-alone sustainability report (down from 57 percent in 2019), rather than including ESG disclosure in other documents. There are, however, “jurisdiction-specific trends toward reporting in annual reports and integrated reports, which provide more connectivity between ESG and financial information and support integrated decision making within companies.” In 2021, 24 percent of the 1,350 companies studied reported ESG data in their annual report, 21 percent issued an integrated report, and five percent did not report on ESG.

  • The great majority of reporting companies (86 percent) use more than one reporting standard or framework. Use of the Taskforce on Climate-related Financial Disclosure (TCFD) framework and of the Sustainability Accounting Standards Board (SASB) standards has “grown dramatically” since 2019. In 2021, 49 percent of ESG reporters referred to or applied the SASB standards and 63 percent referred to or applied the TCFD framework, up from 15 percent and 24 percent respectively in 2019.

  • Sixty-seven percent of companies reviewed in 2021 disclosed emissions reduction targets. Eighty-seven percent of those companies also provided information about how they plan to reach their target.

  • As noted above, 64 percent of companies obtained third party assurance on at least some of their ESG reporting. Assurance engagements most frequently covered greenhouse gas metrics, although more than half (53 percent) encompassed a range of ESG disclosures.

  • Audit firms performed 57 percent of assurance engagements, a decrease from 63 percent in 2019. Ninety-seven percent of audit firm-related engagements resulted in limited assurance reports, while 58 percent of engagements conducted by other service providers resulted in limited assurance. (For other service provider engagements, 22 percent resulted in moderate assurance and 15 percent in reasonable assurance; 5 percent were classified as “other.”)

The State of Play report contains detailed information concerning reporting and assurance practices on a country-by-country basis. Audit committees might find this material of interest in benchmarking their company’s approach to ESG disclosure and assurance.

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