Regulators worldwide are scrutinising corporate disclosures more closely than ever. In the UK the FCA is proposing to extend anti-greenwashing laws to portfolio managers. In Australia, ASIC has recently cracked down on several investment managers for greenwashing in Product Disclosure Statements (PDSes). In light of this, ensuring each disclosure is backed up by appropriate evidence is key to regulatory compliance and reputation management. 

Global trends in combatting greenwashing

With greenwashing and greenhushing a growing concern, regulators worldwide are rolling out new standards to ensure sustainability and climate-related disclosures are not misleading. In Australia, ASIC has announced greenwashing as an enforcement priority, cracking down on companies found to have made ESG claims that were misleading or inaccurate, and imposing $11.3m in penalties last year alone. 

Referring to a recent infringement notice issued for greenwashing, ASIC Deputy Chair Sarah Court explains the notice ‘should send a message to the financial services industry that ASIC is continuing to focus on greenwashing broadly, in statements to the market, disclosure documents, marketing material and on social media.’

In the UK, Sacha Sadan, Director of Environmental, Social and Governance at the FCA says ‘Consumers care about investing in products that have a positive impact on the planet and people. That’s why we want to boost the integrity of the market and ensure people can make informed decisions with their money.’

Why is verification important in corporate reporting? 

Documents like annual reports tell the story of a company’s previous year, and this story should convey accurate information that is of value to external stakeholders. Verifying that each statement made is true and not misleading can reduce risk down the line, increasing investor confidence and market positioning. 

Narrative statements, whether forward-looking or financial, should ideally all be backed by evidence. However, without the right tools and support, line-by-line verification can become a resource-intensive process. It might involve manually tracking statements in spreadsheets, documents, and email chains, with various teams and subject matter experts coming in to verify individual statements, only becoming more complex with updated versions of the main report and the supporting documents. Not only is this time-consuming and frustrating, but it’s prone to human error. 

One alternative to a robust verification process is relying on broad-brush sign-offs, which leaves companies exposed to regulatory and reputational risk. There is a better way to realise the benefits of statement-level verification while managing complexity.

How some listed companies are doing it

Many ASX and FTSE-listed companies simplify verification with tools like Atticus that manage the process, end-to-end. Using a verification tool means that all your supporting documents, links, and notes are in one place, and shared with the whole team. This greatly reduces the margin for error while also saving time for everyone involved.

Atticus can highlight which statements need evidence, help manage new report drafts, capture multiple levels of sign-off, and carry over duplicate verification work. It also features an auto-populating audit trail that can be exported in a board-ready pack once the verification of the whole document is complete. It’s used by 40% of the ASX100 and many of the FTSE100, helping 20,000+ users increase their confidence in their disclosures.

For Atlas Arteria, Atticus has made collaboration simple, even with 30 global team members involved in verification. The individuals involved are from departments like ESG, commercial, finance, forecasting and analytics, operations, legal and the company secretariat. By using Atticus, Atlas Arteria was being able to verify up to 300 statements for their half-year results.

Global law firm BCLP has improved outcomes for their client, a major global fintech company, by using Atticus to verify successive annual reports. Throughout this complex process, the firm could provide more accurate updates to their client on the progress of the verification. When the report was finished, the client was equipped with a final report which showed how each verification was made and by whom. 

The CoSec team of ASX-listed company Orica was able to dramatically streamline their annual reporting processes using Atticus. This not only reduced risk but gave time back to the team to spend on higher-leverage work. Orica particularly benefited from features that allow multiple stakeholders to work simultaneously in a single platform, making it easy to coordinate sign-offs across multiple levels of the organisation. 

Verifying corporate reports is a key strategy for ensuring the integrity of your published documents. While manual verification can be lengthy and painful, tools like Atticus help streamline the process and ensure that your team can produce fully verified corporate disclosures with full confidence.