Singapore companies boost ESG assurance with audit firms: report

Globally, 73% of large companies across G20 nations obtained assurance on at least some sustainability disclosures in 2023.

Singapore has recorded a significant uptick in the use of audit firms for sustainability assurance, marking a 6-percentage point rise in 2023, according to a new global study released by the International Federation of Accountants (IFAC) and AICPA & CIMA.

This boost positions the city-state amongst global front-runners in strengthening the credibility of environmental, social, and governance (ESG) disclosures.

Globally, 73% of large companies across G20 nations obtained assurance on at least some sustainability disclosures in 2023, up from 69% the year before. Five years ago, that figure was just 51%. Assurance continues to focus most on greenhouse gas emissions, the most commonly verified metric.

Audit firms remain the top providers of sustainability assurance, handling 55% of engagements worldwide. However, their share slipped slightly from 58% due to structural shifts, particularly in the European Union, where single consolidated reports replaced multiple individual ones.

The data also showed that companies taking their first step into sustainability assurance tend to engage consultants or non-audit service providers, especially for emissions-specific reports.

But as reporting matures, many transition to using their statutory financial auditors for ESG verification, particularly when sustainability disclosures are integrated into annual financial reports.

More than three-quarters of companies now include sustainability data in their annual or integrated financial statements. Of these, most turn to their official auditors for assurance, underscoring the growing importance of tying ESG credibility directly to financial integrity.

Aside from Singapore, other major markets such as South Africa, the United Kingdom, and the United States also saw increased reliance on audit firms for sustainability assurance in 2023.

The study covered 1,400 companies across 22 jurisdictions and spans data from 2019 to 2023. It found that 98% of companies continue to report on sustainability, a number unchanged from the previous year.

Notably, the number of firms including ESG information in their annual reports has jumped from 18% to 44% over five years, another indicator of its growing mainstream relevance.