Reducing the expectation-performance gap in assurance of Global Reporting Initiative (GRI) sustainability reports in Brazil

Reducing the expectation-performance gap in assurance of
Global Reporting Initiative (GRI) sustainability reports in
Brazil

The increasing relevance of sustainability is transforming the way business is conducted. The sustainability concept is challenging organisations to make choices about the way in which business is conducted that include consideration of
environmental and social aspects as well as economic. Sustainability reports are a valuable tool for organisations to communicate with their stakeholders, especially on their social and environmental performance. In this context, the assurance process is the most common activity used by organisations to give credibility to their
sustainability reports.

As assurance of sustainability reports is still voluntary and not regulated in a majority of countries, there are organisations from different sectors providing different types of assurance services. This difference in services provided by assurance organisations has resulted in questions being raised about the quality of assurance
services and to what extent this type of service is helping organisations to enhance the credibility of their sustainability reports. This research aims to explore whether there is a reasonableness gap and a performance gap across three different groups of participants (assurers, reporters and readers) regarding the assurance process of GRI sustainability reports. In addition, it identifies reasons for those gaps found, and proposes recommendations to improve the assurance process of GRI sustainability
reports and reduce those gaps.

To achieve these research aims, seven research sub questions were developed and investigated through an embedded design mixed method. This design involved
quantitative data embedded in a qualitative approach and used Brazil as a single exploratory case study. According to some authors, Brazil has emerged as a leading hot-spot of sustainability reporting.

Results of the research provide support for the existence of a reasonableness gap among readers and reporters and a performance gap on the part of assurers regarding
the assurance of GRI sustainability reports. Second, this research identified several reasons for the existence of those gaps and provided recommendations to reduce
them. Readers and reporters indicated that the scope of the assurance process seems to involve just checking numbers instead of assessing qualitative information and assurers are too superficial in their analysis. Some of those criticisms were addressed to assurers representing accounting firms. Further, according to some Assurers,
organisations just want an assurance statement in their sustainability report regardless of the quality of the assurance process conducted and the scope assessed.
The results demonstrated that most of the participants in all groups are not satisfied with assurance processes of GRI sustainability reports. Particular concerns include
variation in the assurance methodology applied by different assurers and the lack of clarity about the scope and the assurers’ opinion about the sustainability reports in
assurance statements. It was also identified that the majority of the participants do not have knowledge about the GRI recommendations for assurance processes and
most of them believe sustainability reports’ readers cannot understand the assurance statements provided.

This research contributes to the practice of assurance of GRI sustainability reports by providing recommendations for improvement. Recommendations are proposed based
on the participants’ ideas and based on the Content Index Model developed by this research. The Content Index Model was proposed to GRI in March 2012 and included in the latest version of its guidelines launched in May 2013. This research also makes contributions to knowledge about the assurance process of sustainability reports and expectation-performance gap theory.