Independent third-party verification serves to strengthen the credibility of disclosed non-financial data and provide management and shareholders with the assurance that they have a comprehensive overview of the company's performance.
A growing number of stakeholders, particularly among lenders and investors, are now seeking third-party assurance of a company's actual performance. This assessment often relates to ESG metrics that relate to specific products, such as green loans.
Stakeholders who go beyond traditional financial information and make informed decisions through non-financial reporting are looking to gather data and insights from multiple reputable and unbiased sources.
Boards may not have control over all the information that circulates about their company. Nonetheless, they are responsible for the information they provide to stakeholders, especially when it comes to the primary risks associated with their business. This information must be both accurate and reliable to ensure trustworthiness.
Third-party verification can also achieve the following:
- Minimize legal risks
- Ensure compliance with global standards
- Attract investment opportunities
- Identify weaknesses in the reporting process and control mechanisms.