CSRHub, a data platform specialising in assessing the Environmental, Social, and Governance (ESG) performance of companies, has released a report confirming that companies using AccountAbility’s AA1000 Assurance Standard (AA1000AS v3) for their ESG reports achieve higher ESG scores.
The report, titled ‘AA1000AS Found to Add Value to ESG Reporting’, highlights how external standards bolster trust in companies and improve the quality of their sustainability reporting.
The study provides valuable insights into the impact of ESG reporting on company performance. It found that on a scale of 100, companies that issued ESG reports saw an average increase of 5.4 points in their ESG rating over two years, compared to a 0.9-point increase for non-reporting companies.
Also, companies that assured their ESG reports using AA1000AS v3 experienced a 5.9-point increase in ESG scores—1.4 points more than those who did not report. These companies achieved an average ESG score of 59.1, placing them in the top quartile of all companies tracked by CSRHub. Regular users of the AA1000AS v3 standard exhibited continuous improvement in their ESG scores over time.
Additionally, The AA1000AS v3 standard helped companies grow in six sustainability subcategories: leadership ethics, board management, training, health and safety, diversity and labor rights, compensation and benefits, and product indicators.
As ESG reports become a key data source for ESG rating companies and research firms, the number of companies reporting on sustainability is steadily increasing. However, this rise in reporting is accompanied by increased scrutiny from stakeholders, who rely on these reports to evaluate a company’s commitment to sustainability.
Sustainability experts agree that issuing an ESG report enhances a company’s reputation among stakeholders. “The AA1000AS v3 provides a holistic way of holding an organization accountable for its sustainability management, performance, and reporting practices by assessing the adherence of the organization to the AA1000 AccountAbility Principles,” Sunil (Sunny) A. Misser, CEO of AccountAbility said.
The AA1000AS v3 assurance standard goes beyond simple data verification. It focuses on ensuring responsible and comprehensive assurance engagements by adhering to the AccountAbility Principles of Inclusivity, Materiality, Responsiveness, and Impact.
Companies that follow these principles and incorporate the AA1000 standards in their ESG reports experience several key benefits including increased credibility, stronger investor confidence and culture of continuous improvement.