Benchmarking Sustainability and Carbon Assurance in the FTSE 350

A new report by Smart Sustainability suggests that the carbon and sustainability data put out by FTSE 350 companies is lacking in credibility. It identifies a need for standardisation and transparency in assurance and questions why some companies, especially in high impact industries, do not externally verify their carbon data.

The study benchmarks the assurance of sustainability reports in response to investor demand for a way to compare the credibility of sustainability reports. It finds that only 75 companies publish some form of assurance in the FTSE 350. Only 62 of these are carried out independently and based on a recognised assurance standard. Assurance is more widespread in the FTSE 100 than in the FTSE 250, with 54 statements in the former versus only 21 in the latter, but many companies are either not verifying the emissions that they report or are not reporting carbon data at all. It is crucial that investors have accurate carbon data. A shocking number of companies are failing to report and verify carbon data. Only 38 assurance statements in the entire FTSE 350 clearly say that carbon has been verified. Of these, only two statements explicitly follow a standard for verifying carbon and only seven refer to a carbon reporting criteria. If investors would never accept non-verified financial data, this report questions why they would accept non-verified carbon data. 

The likelihood of mandatory GHG reporting for UK companies may also fuel increased demand for verified carbon data.