EABIS 9 th Annual Colloquium 2010 St. Petersburg, Russia

1. Assurance of Sustainability ReportsProfessor Jeffrey Ridley Professor Dr. Kenneth D’Silva Centre for Research in Accounting, Finance & Governance London South Bank University, London, England CIBS LECTURE 14TH FEBRUARY 2012

2. EABIS 9th Annual Colloquium 2010 St. Petersburg, Russia Contribution of Internal Auditing to Sustainability Assurance in Emerging Markets Corporate Governance Vol. 11 issue 4 2011 - A New Era of Sustainability UNGC (2010) - Vision 2050 – The new business agenda WBCSD (2010) - Europe 2020 – A strategy for sustainable and inclusive growth EUROPEAN UNION COMMISSION (2010)

3. Governance and Stakeholder Theories ...encompasses environmental, social and corporategovernance issues, as embodied in its Ten Principles which cover UNGC (2010) HUMAN RIGHTS LABOUR ENVIRONMENT ANTI-CORRUPTION

5. Nine Sustainable Pathways 2050WBCSD (2010) PEOPLE’S VALUES * HUMAN DEVELOPMENT ECONOMY * AGRICULTURE * FORESTS ENERGY & POWER * BUILDINGS MOBILITY * MATERIALS

6. Vision 250 WBCSD (2010 p. 60) With significantly more capital flowing among increasing groups of collaborators, there will be growing demand for transparency, which involves reporting, accounting and assurance services.

7. Current Organisation Issuesand Guidance UNGC (2010) p. 47 Interrelated sets of enabling conditions for [FULLY] integrated sustainability CUSTOMERS EDUCATION MEASURES REGULATION

8. EUROPE 2020 (EC 2011) The Commission is proposing five measurable EU targets for 2020 that will steer the process and be translated into national targets: - employment - research and innovation - climate change and energy education - poverty They represent the direction we should take to measure our success.

9. Our Content Analysis of UNGC New Era of Sustainability • YESNO • MANAGE W AUDIT • MONITOR O ASSURANCE • MEASURE R COMPLIANCE • GOVERNANCE D CHECK • REGULATE S INSPECT • REPORT

10. Monitor & Measure SUSTAINABILITY ASSURANCE UMBRELLA InternalExternal Independent Objective Management Global Supervision Government Regulator INTERNAL AUDIT Independent Objective EXTERNAL AUDIT

11. International Research Conference 2011 The Sustainability Challenge Assurance of Sustainability Reports:Insights And Evidence from UK Companies Included - Anuj Saush, LSBU Energy & Environment Manager

12. Research Paper Abstract Purpose The purpose of the paper is to illuminate the linkage between governance and sustainability considerations, and to highlight the fact that the value of sustainability reporting is diminished when it is not independently assured

13. Research Paper Structure INSIGHTS 1.Governance and Stakeholder Theory 2. International Guidelines for Sustainability Reporting and ASSURANCE EVIDENCE • Current reporting practices and ASSURANCE in UK companies POLICY CONSIDERATIONS AND CHANGE

14. Sustainability Reporting GuidelinesGRI (2011) Uses the term ‘external assurance’ to refer to activities designed to result in published conclusions on the quality of the report and the information it contains.

15. Assurance in UK Companies 8 GRI Reporting Framework registered 18/5/2011 Application Levels Reported Acelor Mittal A+ x 2 Anglo American A BAE Systems B+ x 1 BG Group B x 1 British American Tobacco C+ x 1 London 2012 C Segro U* x 3 Thomas Cooke Group

16. Assurance in UK Companies AssuranceContent Analysis Published Conclusions

17. Policy Considerations and Change ORGANISATION ASSURANCE CHANGES NEEDED Stakeholders – involvement evident before reporting Responsibility – include verification practices in reporting Board – to be driven by all board committees Coordination of assurance – evidence of independence Published conclusions – compliance with GRI framework Motivation for improvement – use of awards and standards

18. MULTI-CHOICE QUESTIONS