Transparency and sustainability reporting: Building trust through defined scope and external assurance

The International Day for Universal Access to Information, observed annually on Sept. 28, is a global reminder of the importance of transparency, accountability and the fundamental right to information. In this spirit, the World Economic Forum’s “Global Risks Report 2025” highlights the growing threat of misinformation — a challenge that underscores the need for openness and clarity.

Organizations that embrace transparency strengthen their reputations, improve operational efficiency and gain a competitive advantage. This proactive approach helps mitigate compliance and regulatory risks while fostering greater trust among investors and stakeholders.

Within our ESG Scores and Raw Data, underpinned by the S&P Global Corporate Sustainability Assessment (CSA), we track companies’ sustainability data reporting boundaries and external assurance scope.

The CSA is an annual evaluation of sustainability practices covering about 14,000 companies worldwide. In this review, we analyze the reporting boundaries and third-party assurance availability of 12,824 public companies across 11 sectors as part of the 2024 research cycle.

Figure 1 shows that, on average, more than half of the assessed companies provided comprehensive information on the scope or boundaries of their public sustainability reporting. The proportion of companies using external assurance was lower, with 1 in 4 sharing information linked to such practice. The materials and utilities sectors led the way in reporting the scope of their sustainability disclosure, with utilities also having the highest share of companies providing information on the external verification of the reported information and data.

At the other end, the healthcare sector recorded the lowest level of reporting for both aspects. Initial challenges linked to determining disclosure boundaries include navigating complex company structures that complicate scope definition. When it comes to implementing external assurance, companies might be hindered by significant costs and additional internal processes to ensure data reliability and audit readiness.

In assessing the comprehensiveness of a company’s external sustainability assurance, the CSA evaluates several key factors, such as the use of recognized assurance standards, the independence of the auditor and the type of assurance provided (e.g., limited or reasonable). It also considers whether the assurance statement clearly defines the scope of coverage, particularly regarding environmental and social data. 

As illustrated in figure 2, companies more commonly obtained third-party assurance for environmental key performance indicators (KPIs) than for social ones, with Europe and Latin America leading in adoption. Nevertheless, fewer than half of the companies reviewed included a clearly defined scope for either environmental or social data in their assurance statements.

The regional differences in third-party assurance of sustainability data might partly be attributed to varying regulatory environments and market expectations. In Europe, for instance, regulations such as the Corporate Sustainability Reporting Directive (CSRD) already mandate at least a limited assurance on certain environmental indicators, encouraging companies to engage independent auditors. This regulatory push has led to a more mature assurance landscape, particularly for environmental KPIs. Latin America, while less regulated, often sees strong stakeholder pressure and voluntary alignment with international standards.

In contrast, Asia-Pacific and North America, despite representing a large share of assessed companies, lag in assurance coverage. In North America, sustainability assurance is largely voluntary, and companies may prioritize internal controls or investor-focused disclosures over third-party verification. Similarly, in Asia-Pacific, regulatory frameworks are still evolving, and assurance practices vary widely across countries, contributing to lower overall coverage of environmental and social KPIs.

While defining boundaries in sustainability reporting is becoming standard practice, the prevalence of external assurance remains relatively low. However, as regulatory requirements intensify and the demand for data accuracy grows, companies have an opportunity to strengthen stakeholder confidence. Independent assurance affirms the reliability of reported sustainability data and serves as a formal endorsement of a company’s commitment to transparency and accountability.