Report compares sustainability assurance providers, by Verdantix
A new report is out now that states that increased scrutiny of environmental, social and governance disclosures in financial and sustainability reports will require Fortune 500 firms to seek much more comprehensive assurance of their sustainability data and controls in 2014
The study from independent analyst firm Verdantix, called Green Quadrant: Sustainability Assurance (Global), states that corporations with a global footprint should turn to six leading suppliers of sustainability assurance – Bureau Veritas, Deloitte, DNV, EY, KPMG and PwC – for assurance engagements across GHG data, CDP disclosures, sustainability reports, supply chain compliance, product sustainability and sustainability management systems.
Rodolphe d’Arjuzon, Managing Director, Verdantix, said: “The global market for sustainability assurance is maturing. There is greater acceptance of reporting frameworks such as the Global Reporting Initiative and assurance standards such as AA1000AS and ISAE3000, but the market is still complicated by the presence of several types of suppliers – from consulting, financial audit and environmental certification backgrounds – vying for buyers’ attention.
“Demand for assurance lags the adoption of sustainability reporting. In Australia, South Africa and Western Europe there is appetite for broader assurance engagements – spend ranges between 5% and 12% of financial audit fees – but in countries like Canada, China or the United States assurance spend is often derisory.”
The study identifies 29 notable providers of sustainability assurance but found only nine had the capabilities to deliver globally. The comparison of the global providers – which includes ENVIRON, ERM CVS and SGS – is based on 63 assessment criteria and in-depth interviews with 15 customers with collective revenues of $351 billion. The six market leaders have established market positions ahead of other firms due to their:
- Long client lists across all sectors and geographies. Leading firms provide an assurance statement for at least 100 sustainability reports annually. For example, Bureau Veritas has assured the reporting of AstraZeneca, Lukoil, Nestlé and Network Rail
- Broad service offerings that integrate many expertise areas. Financial audit firms staff assurance teams with experts from their audit practices, sustainability consulting teams and industry practice groups – meeting the buying criteria of complex, global corporations
- Commitment to shaping market standards. The leaders shape the market through the technical committees and working groups of organizations such as the CDP, the Global Reporting Initiative (GRI), the International Accounting Standards Board (IASB), and the International Integrated Reporting Council (IIRC)
- Long-running marketing programs to drive awareness. The Big Four financial audit firms in particular have published numerous thought leadership reports on sustainability reporting and assurance to help corporations understand the value of assurance
- Innovation for product and supply chain sustainability. DNV earned the top score for product sustainability assurance. It has invested in product water footprints as well as creating its own standard, ProSustain, against which clients can have their management system or products certified
Will Public Procurement Budgets Increase in 2021?
Procurement is more than just a private enterprise. COVID-19 reminded us that sourcing materials is an essential part of the government’s role. Throughout 2022, tiny departments sourced massive amounts of personal protective equipment (PPE), medical supplies, and emergency vaccines and testing kits. Even non-procurement professionals were pulled into the fray, as frantic timelines demanded nothing less.
According to Celeste Frye, co-founder and CEO of Public Works Partners, the crisis brought procurement to the attention of skilled employees who had never considered it. As non-procurement personnel stepped up to help their coworkers, many found that they’d stumbled upon a critical and rewarding job. “Existing public employees have seen the essential nature of the work”, Frye said. “[They’ve] gained some critical skills and possibly [grown] interested in pursuing procurement as a longer-term career”.
Small, Local Suppliers Take Charge
Frye, whose firm helps organisations engage stakeholders and develop long-term procurement strategies, thinks it well worth the effort to open one’s mind to new opportunities. Cooperative contracts, for instance, can help public departments and municipalities save money, time, and effort. By joining together with other towns or cities in the region, public procurement teams aggregate their purchasing power and can drive better deals.
These cooperative contracts have the added benefit of advancing equity. Smaller suppliers that struggle to compete with established firms for government contracts can act as subcontractors, helping big suppliers fulfil bits of the project. Once they get their foot in the door, small, local, and disadvantaged suppliers can then leverage that government relationship to take on additional projects.
Especially as governments start to pay attention to procurement resilience, public procurement departments must expand their requests for proposals (RFPs) to take into account innovative solutions and diverse suppliers. According to Frye, Public Works Partners—a certified female-owned firm—has benefitted from local and state requirements that specify diversity.
Post-Pandemic Funding Swells Procurement Budgets
And the pandemic won’t be the end of it. City governments need to build sustainable energy infrastructure such as solar panels, charging stations, and recycling plants, ensure that masks and medicines are never in short supply, and source new technologies to keep up with cloud and cybersecurity concerns.
Public procurement budgets will likely increase to match demand. As Peter Ware, Partner and Head of Government at Browne Jacobson, explained, “in a non-pandemic world, the [U.K.] government spends on average around £290 billion on outsourced services, goods, and works...anywhere between 10% and 14% of Gross Domestic Product (GDP). Post-pandemic, city procurement will only increase as national governments provide local divisions with emergency funding.
And in truth, government employees might jump at the opportunity. Frye noted that public procurement could give immediate feedback on new programmes: “[Procurement] is where new laws and policies ‘hit the road’ and are implemented”, she said. “Professionals in these fields get the satisfaction of creating real change and seeing quantifiable outcomes of their work”.