Crossing your fingers without assurance is not a good strategy
“When assurance isn’t legally required, the choice is simple: invest a modest amount in independent verification, or accept the risk that sustainability claims are flawed, misleading or incorrect. The cost of assurance is minor compared to the risk of public embarrassment, fraud allegations and greenwashing scandals.”
Pauline Bailley, Head of ISO Certifications at Speeki
Six reasons why a ‘fingers crossed’ strategy is unwise
Investors won't trust unverified data
Institutional investors and ESG-focused funds increasingly expect independent assurance over sustainability disclosures before making or maintaining investment decisions. Self-reported, unverified ESG data is viewed as unreliable and introduces information risk that sophisticated investors will not accept.
This affects the cost of capital. Companies with assured sustainability data often secure better financing terms, including access to green bonds and sustainability-linked loans. Those without assurance face greater scrutiny and may incur higher borrowing costs.
In competitive capital markets, unverified sustainability reporting can be the difference between securing funding and losing out to competitors with credible, assured disclosures.
You're creating legal and litigation exposure
Unverified sustainability claims create legal risk that is often underestimated. Regulators are taking action against misleading ESG disclosures, and consumer protection authorities are prosecuting greenwashing under misleading conduct laws.
Shareholders are also pursuing claims based on overstated sustainability performance. Without independent assurance, organisations have weaker defences and cannot rely on third-party verification to demonstrate due diligence or good faith. In disputes, the absence of assurance may be presented as evidence of negligence.
The cost of assurance is small compared with potential legal fees, settlements and penalties arising from challenged sustainability claims.
Greenwashing allegations can destroy your reputation
In an environment of heightened ESG scrutiny, unverified sustainability claims are increasingly met with scepticism or suspicion. Investors, NGOs, journalists and regulators actively challenge exaggerated or unsupported environmental and social statements.
Without independent assurance, a single challenge to sustainability data can escalate into greenwashing allegations, attracting media attention, customer backlash and regulatory scrutiny.
The reputational damage associated with greenwashing far outweighs any short-term savings from avoiding assurance. Once trust is lost, it is difficult to restore.
You're handing competitors a market advantage.
In many sectors, customers, supply chain partners and tender processes require verified sustainability credentials. Operating without independent assurance places organisations at a competitive disadvantage.
Large companies increasingly expect suppliers to provide assured ESG information as part of procurement. Without verification, sustainability claims carry less credibility than those of competitors that have invested in assurance, potentially affecting contracts, partnerships and market position.
Competitors with assured disclosures are not just meeting expectations. They are strengthening their commercial position.
You're gambling with regulatory compliance
Sustainability reporting requirements are tightening globally, and regulators are placing greater scrutiny on the accuracy of ESG disclosures. Even where assurance is not yet mandatory, regulatory direction clearly points towards verification becoming a requirement.
Delaying independent assurance means building reporting systems and data processes without external validation. When assurance becomes mandatory, organisations often discover fundamental weaknesses in how data has been measured and reported.
Early adoption of independent verification helps ensure compliant processes are established from the outset, rather than requiring remediation of years of potentially non-compliant reporting.
Internal teams have blind spots you can't see
Internal teams are close to the data, processes and assumptions behind sustainability reporting. That proximity creates blind spots.
Confirmation bias, organisational culture and pressure to present positive outcomes can influence how data is collected, calculated and disclosed, even with strong internal controls.
Independent verifiers bring fresh perspective, sector benchmarking experience and no stake in the outcome. They identify methodological errors, boundary inconsistencies, data gaps and calculation issues that internal teams often miss due to familiarity with their own systems.
Without external verification, organisations assume internal checks are sufficient. That assumption is often challenged only after public disclosure, when correction becomes far more difficult.
