This article has been reviewed according to Science X's editorial process and policies. Editors have highlighted the following attributes while ensuring the content's credibility: The European Union's Omnibus reform has exempted most of the companies it once covered from mandatory sustainability reporting under the Corporate Sustainability Reporting Directive (CSRD). It has also dropped plans for tougher "reasonable" assurance checks on green claims, which come closer to a full audit.
Meanwhile, ISSA 5000, the new global standard for sustainability assurance, takes effect for reporting periods beginning on or after Dec. 15, 2026, in jurisdictions that adopt it or issue a national equivalent, such as Hong Kong and Brazil. Timelines vary: Australia's equivalent was applied in January 2025, while Canada's (CSSA 5000) starts on Dec. 15, 2027. At a time when companies have never been more vocal about their green credentials than they are today, is sustainability assurance considered red tape or a climate tool?
The gap between what firms say and what they do has a name: greenwashing, and courts and regulators across Europe are increasingly calling it out. One remedy is an independent verification of sustainability reports, known as "assurance." An outside firm, often one of the Big Four accounting groups (Deloitte, EY, KPMG and PwC), checks a company's sustainability report, just as auditors would check a company's accounts. International standards now cover both what companies should report and how those reports should be checked.
In our study, published in the Journal of Accounting Literature, we analyzed data on large listed companies in 34 countries from 2002 to 2019, a period when sustainability reporting assurance was largely voluntary. We compared the greenhouse gas emissions of firms whose sustainability reports were independently verified with those of firms whose reports were not. The most important finding concerns green promises.
Many companies run programs to cut emissions, but the results differ mainly by sustainability assurance. Among firms with verified reports, such initiatives were associated with greater emission reductions. Among firms whose reports were not independently checked, more initiatives were linked to higher emissions, a pattern consistent with greenwashing.
Without scrutiny, it seems, some climate action is more about image than impact. The pattern held when one of the Big Four did the verification. The effect of assurance also depends on where a company operates.
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