The Current State and Future Implications of Environmental, Social, and Governance Assurance

Abstract

This study examines environmental, social, and governance (ESG) reports of companies on The Wall Street Journal’s and Investor’s Business Daily’s top 100 sustainable companies. We collect information on whether the reports are assured, the type of assurance and standards cited, the assurance provider, and whether or not the provider also audits the financial statements. Fifty-eight percent of sample companies voluntarily sought external assurance services for some portion of these reports, with limited assurance primarily provided. Big 4 firms provide assurance for most international companies but assure only 16 percent of U.S. companies. We discuss practical implications and future research areas, including cross-country comparisons, ESG assurance, and standard-setting.