AccountAbility 1000 - Accountability for sustainable development
Launched in 1999, the AA1000 Framework was developed to improve organisational accountability and sustainability performance by learning through stakeholder engagement. It outlines how to design and manage an organisation's social and ethical accounting, auditing and reporting processes. Since the launch, stakeholder feedback surfaced a need for a modular approach that would allow individual elements of the process to be explored further, leading to the creation of the AA1000 Series.
The AA1000AS was launched as the first Module as the need for an assurance framework was greatest. Guidance Notes (GN), addressing the "how to" along with Practitioner Notes (PN), reflecting practical experiences of Module implementation, will support all Modules. Other Modules such as Risk Management and Stakeholder Engagement will follow in near future.
When non-financial reporting changed from being a short, glowing commentary on an organisation's philanthropic activities, embedded in the mid pages of its annual report, into stand-alone sustainability reports, it was accompanied by a complementary development in assurance. Concerns about the impact of companies' production processes, labour standards in supply chains and human rights abuses in developing countries could not be assuaged solely organisational reporting. As in the financial sphere, information needed to be assured by an independent party. External assurance became an essential part of the process, driven by the need for more credible information about performance both within and outside the organisation. Alongside the development of social and environmental and quality management audits such as those of the ISO family, SA8000 etc. emerged as a way of verifying and improving the quality of an organisation's products and services. Assurance has subsequently been on the rise.
Having started off with a greater focus on "accounting", or data quality, the interest in assurance has quickly shifted towards a more complex concept focusing on what really matters to stakeholders i.e. stakeholder-based materiality in order to handle the complex issues that sustainability raises. While the value of accuracy focused assurance to ensure reliable and comparable data for management and information users still remains, stakeholders expectations have clearly shifted towards assurance processes that go beyond assessments of accuracy to exploring the quality of processes such as stakeholder engagement, organisational learning and innovation as well as processes by which the organisation ensures strategic alignment with key stakeholder expectations.
In March 2003 AccountAbility launched the first international assurance standard that advocates a reassessment of stakeholder-based materiality. Following the AA1000AS an assuror is expected to assess an organization's performance against sustainable development commitments, policies, and strategies as well as stakeholder expectations and behaviour using three principles core to assurance.
Richard Howitt MEP at the European Parliament and Raporteur for Corporate Social Responsibility, con-cluded, "Any reservations companies may have had against pursuing independent verification of their social & environmental performance can now be put on one side. AA1000AS is credible, authoritative and accessible for business and all stake-holders who have an interest in corporate standards". Similarly, Barry Coates, until recently Director of the World Development Movement, asserts, "If financial auditors were required to disclose as much about themselves as will be required of social & sustainability auditors under AA1000S, the Enron-Anderson debacle might never have happened".
AA1000AS - Key features
·First international assurance standard applicable to sustainability reporting and management.
·Driven by the desire to facilitate both improved accountability processes and overall organizational performance via effective stakeholder engagement.
·Principles based, driven by the three principles of Materiality, Completeness and Responsiveness.
·A future-orientated approach that allows an assessment of the adequacy of an organization's response to stakeholders' interests and expectations.
·Is aimed to provide a wide platform for innovation and learning relating to the design and implementation of accountability processes - thus AA1000AS in not a certifiable compliance procedure.
Freely available on a non-proprietary basis
AA1000AS in brief
The AA1000AS provides generally applicable principles for assessing, attesting to, and strengthening the credibility and quality of organizations' sustainability reporting and associated management processes, systems, and competencies. It provides guidance on the assurance process for the assuror as well as the reporting organization.
The 3 principles of materiality, completeness, and responsiveness provide the framework within which an assuror can assess the report and related sustainability management processes.
·Materiality requires indicating how one defines which stakeholder issues are material to one's business. For example compliance with law, industry codes, internal policy, or stakeholder expectations. These elements may vary across organizations end-markets according to regulatory, cultural, or geographical contexts.
·Completeness involves indicating how one: understands and measures one's performance, impacts, and stakeholder views relating to identified material issues. This includes performance relating to organizational activities, products, services, sites, subsidiaries etc.
·Responsiveness requires indicating how one responds to material stakeholder concerns and interests in a timely fashion, and how sufficient resources are allocated to implement related policies, commitments etc.
Key to the provided guidance is the notion of stakeholder engagement and its role in both sustainability management and related assurance processes. Stakeholder engagement is at the core AA1000AS. The reason for this is two-fold: firstly, the standard is built on the belief that accountability processes need to be tailored to embrace issues that are specific to diverse organizations, their business sectors, stakeholders and business strategies and models. Secondly, because good quality stakeholder engagement processes can powerfully inform internal decision-making and enable learning and innovation.
The AA1000AS provides guidance to assurors on the content of public assurance statements. Along with issues such as the independence, impartiality and competencies, the standard requires the assuror to provide a conclusion on whether the organization:
·Provides a fair and balanced representation of material aspects of the organization's performance for the period in question (i.e. materiality).
·Has effective processes in place for: identifying and understanding activities, performance, impacts and stakeholder views (i.e. completeness).
·Has effective processes in place for: managing aspects of sustainability Performance and responding to Stakeholder views, including any significant weaknesses in the underlying organizational processes, systems and competencies (i.e. responsiveness).
Additional commentary should be provided including the progress since the last report and suggestions for improvements in reporting, and associated processes, systems & competencies for the next cycle.
Note: Assurance is the desired outcome one is seeking to achieve, not a standard, method or activity. It must not be confused with auditing or verification, which are no more of less than particular ways or tools to provide assurance. "Assurance" is the desired result, not the tool.
For more in-depth understanding of the application and implementation of AA1000AS AccountAbility offers tailored and general training course. Please contact Philip@accountability.org.uk.
AA1000 AS in numbers
The six corporations that topped a recent UNEP rating of corporate 'sustainability reports' used the AA1000AS as a basis for their external assurance.
Of the 18 reports short-listed for the UK's ACCA (Association of Chartered Certified Accountants) awards 13 used the AA1000AS as a basis for their external audits including six of the eight winners.
The AA1000AS is being increasingly acknowledged as key to underpinning the design of sustainability related performance management systems and is being used by a rapidly growing number of global corporations, directly through its application by risk management functions or indirectly through international auditors to inform external assurance processes. Over the past year, the first full reporting cycle to follow the launch of the standard, the use has increased by more than 50%.
|Organisation using the AA1000AS||34||58||28|
|Assurance Provider using the AA1000AS||14||24||19|
|AA1000AS Adopter and User - Total||48||82||47|
|Reference to principles||4||27||3|
|Grand Total - Use and Reference||52||110||50|
Note: Due to the standards non-propritetory nature the provision of an exact number is difficult. The table above only lists those organisations that either inform AccountAbility or are identified within public consultations on AccountAbility's standards work or associated research projects.
Note: The AA1000AS as mentioned above was only launched in March 2003, however some orgnisations already used the draft version that was put out for consultation to inform their assurance processes in 2002/03. The reporting cycle for 2004 is not yet closed, hence the number is lower than the number for 2003 but expected to exceed it soon.
Assurance Provider Competencies
Recognizing a gap in standards governing the emerging profession of sustainability assurance, AccountAbility and International Register of Certificated Auditors have partnered bringing together their respective expertise to develop a international program for practitioners, both internal and external to an organization whose performance is being assured, including but not restricted to those explicitly using the AA1000AS. The Certified Sustainability Assurance Practitioner Program provides the first multi-stakeholder defined professional competency framework in this area and supports harmonisation by providing practitioners a basis for benchmarking and individual certification.
AA1000AS and its relationship with other Frameworks / Standards
AA1000AS, designed to be a platform that can embrace other frameworks thus allowing and encouraging convergence, is a principle-based standard that does not advocate normative performance criteria, but rather emphasises the importance of processes that should in place to identify, understand, and respond to material issues. It provides a platform onto which the various specialized frameworks such as ISO 14001, SA8000 or Greenhouse Gas Protocols can fit to assess, measure, and manage specific sustainability performance issues, identified though stakeholder-based materiality. (For more visit Future of Assurance, Strategic Challenges, etc.).
Increasing links between key bodies in the field is crucial in driving clarity, convergence and value-added approaches.
AccountAbility currently ...
·Co-Chairs the British Standards Institute Sustainability Technical developing BSI's first sustainability standard, which is expected to be influential internationally;
·Leads the UK's Expert Group to the International Standards Organisation in the emerging work stream on social responsibility;
·Is a member of Transparency International's Steering Committee for the Principles on Bribery allowing AccountAbility to contribute to its development;
·Is a member of GRI's technical Advisory Committee and;
·Established a permanent Working Group on the links between the GRI Guidelines and AA1000
Established in 1995, AccountAbility is an international non-profit institute that brings together over 200 members and partners from business, civil society and the public sector. Its work includes:
·Development of accountability tools and standards, notably the AA1000Series
·Undertaking strategic research that explores best practice for practitioners and policy makers in organisational accountability
·Promoting accountability competencies across the professions
·Securing an enabling environment in markets and public policy.