Review of sustainability reports

The review of sustainability reports is becoming an increasingly important part of companies' sustainability work, as demands for transparency, quality, and reliability in sustainability-related information continue to grow. Sustainability information is now used as a basis for investment decisions, financing, procurement, and strategic business decisions, increasing the need for robust processes, high data quality, and clear methodology behind the reporting.

An independent review can help strengthen confidence in reporting and provide reassurance to investors, customers, banks, and other stakeholders. The review can also help identify areas for improvement, strengthen internal processes and controls, and increase the quality and traceability of sustainability-related information over time.

CSRD and ESRS 

We work with the review and quality assurance of sustainability reporting under CSRD and ESRS. This work often includes assessing the double materiality analysis, the structure and content of the reporting, material disclosure requirements and data points, methodology, processes, and data quality, as well as how sustainability-related risks, targets, and governance issues are integrated into the organisation's reporting and governance.

The review aims not only to assess compliance with the regulations, but also to strengthen the quality, transparency, and reliability of the sustainability-related information communicated to the market and other stakeholders.

The EU Taxonomy 

BDO offers review and quality assurance related to EU Taxonomy reporting and taxonomy-related KPIs. This work often includes assessing an organisation's taxonomy-eligible and taxonomy-aligned activities, the application of technical screening criteria, DNSH criteria and minimum safeguards, as well as calculations of turnover, capital expenditure (CapEx), and operating expenditure (OpEx).

We also work with quality assurance of the underlying data, methodology, processes, and documentation related to taxonomy reporting, to strengthen transparency and traceability in the reporting.

Sustainability disclosures and ESG data 

We work with the review and quality assurance of various types of sustainability-related disclosures, ESG data, and climate-related indicators used in external reporting and communication. This can, for example, include specific KPIs, climate-related disclosures, emissions data, investor information, or other sustainability-related data where the organisation wishes to strengthen the quality and credibility of its reporting.

This work typically includes assessing data quality, processes, methodology, governance, and underlying assumptions, as well as how the information is used and communicated to various stakeholders.

Voluntary sustainability reporting 

Many organisations today choose to voluntarily report sustainability-related information to meet requirements and expectations from customers, investors, banks, and other stakeholders. BDO works with the review and quality assurance of voluntary sustainability reporting under, for example, VSME, GRI, or other market standards.

We also work with quality assurance of voluntary reporting inspired by CSRD and ESRS, integrated reporting and other forms of combined reporting where financial and sustainability-related information are brought together, as well as investor reporting and sustainability-related disclosures aimed at the financial market and other stakeholders.

As this field continues to evolve, we also work with reviews related to emerging voluntary frameworks, standards, and market practices within sustainability. The scope of the review is adapted to the organisation's purpose, target audience, and level of ambition, with a focus on transparency, comparability, data quality, consistency, and credibility in reporting.

Common challenges in the review of sustainability reports 

• Data quality and access to underlying information 
  Sustainability reporting is often based on large volumes of ESG data from different parts of the organisation, where quality, traceability, and access to underlying information can vary.
• Unclear processes and division of responsibility 
  Many organisations lack established processes and a clear division of responsibility for data collection, quality assurance, and monitoring of sustainability-related information
• Interpretation and application of regulations 
  CSRD, ESRS, and other sustainability-related frameworks include complex disclosure requirements that can be challenging to interpret and translate into practically achievable reporting.
• Insufficient documentation and traceability 
  A common problem is that methodology, calculations, and assessments are not documented clearly enough to enable effective review and quality assurance 
• Integration into governance and internal control 
  For many organisations, sustainability reporting is still a relatively new area, meaning that internal controls and governance processes are not yet fully integrated into regular business governance.