The Reporting Framework and external assurance

The findings highlighted that this depended on:

• characteristics of assurance engagement (data or process assurance, market regulatory requirements)
• the type of indicator (data based, qualitative nonprocess based, process-based)
• the level of assurance sought (limited or reasonable)
• availability of an assurance standard

The Reporting Framework already provides explanatory notes for all indicators to reduce subjective interpretation of key RI terms and processes, and could enable assurers to provide statement of limited assurance, or where standards exist statement of limited assurance against a standard. Reasonable assurance, which would be sought if the scope was to review the implementation of controls, at this stage would depend on a degree of subjective interpretation by auditors.

Where the indicators’ explanatory notes provide the following information, assurers could assure those indicators:

• examples of answers that are deemed acceptable to the question (sets criteria);
• examples of what it excludes/is out of scope (sets criteria);
• definition for qualitative terms used throughout: e.g. systematic vs occasional, “leading”;
• reference to other detailed guidance either published by the PRI or other organisations with which the PRI seeks to align on reporting (e.g. GRESB for property, OECD on active ownership).

In addition, the AWG recommended:

• Clear definitions for key underlying concepts such as responsible investment and how ESG issues are defined (do they vary depending on companies invested in or are there universal minimum aspects that apply to all investors?)
• Once criteria are set for key concepts consistently referred to in the Reporting Framework, such as “RI policy”, the subsequent questions should link to them instead of introducing terms such as gactivities h that are harder to define.

While the PRI does not seek to become a standard, we will seek to improve and align its definitions and work with standard providers to limit subjectivity in the assurance process. The AWG also agreed it was not necessary or advisable to modify all indicators because they are qualitative. Instead, the AWG recommends the identification of key indicators that should be assured because of the impact they carry. Secondly, the AWG highlighted that some indicators capture qualitative information that provides important insight into the culture, ethics and rigour of an organisation but are not designed to be assured.