Assurance of the leading UK food retailers’ corporate social responsibility/sustainability reports Peter Jones, David Hillier, Daphne Comfort,… [610764]

Corporate Governance
Assurance of the leading UK food retailers' corporate social responsibility/sustainability reports
Peter Jones, David Hillier, Daphne Comfort,
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Peter Jones, David Hillier, Daphne Comfort, (2014) "Assurance of the leading UK food retailers' corporate social responsibility/sustainability
reports", Corporate Governance, Vol. 14 Issue: 1, pp.130-138, https://doi.org/10.1108/CG-03-2011-0027
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Assurance of the leading UK food retailers’
corporate social responsibility/sustainability
reports
Peter Jones, David Hillier and Daphne Comfort
Abstract
Purpose – The purpose of this paper is to offer an exploratory assessment of the employment of
assurance in the Corporate Social Responsibility (CSR)/Sustainability reports published by the UK’s topten food retailers.
Design/methodology/approach – The paper begins with an outline of the characteristics of assurance
and the empirical information for the paper is drawn from the assurance material in the
CSR/Sustainability reports posted on the internet by five of the selected retailers.
Findings – The findings reveal considerable variation in the nature and the scope of the assurance
processes undertaken, at best the accent is on limited assurance and some concerns are expressed
about the independence of the assessment process. The paper concludes that these concerns can be
seen to reduce the reliability and credibility of the assurance process.
Originality/value – The paper provides an accessible review of how the UK’s top ten food retailers are
employing external assurance statements as part of their CSR reporting and as such it will interestacademics, managers within the retail industry and those professionals and consultants who work withthe industry.
Keywords Corporate social responsibility, Sustainability, Assurance, UK food retailers
Paper type Research paper
Introduction
Food retailing is by far the largest sector within the UK retail economy and it is extremely
concentrated with the top ten retailers accounting for 85 per cent of all food sales and just
four of these, namely Tesco, J. Sainsbury, Asda and the Wm. Morrison Group holding a
massive 66 per cent market share (Mintel, 2012). The marked concentration within foodretailing in the UK has given the large food retailers considerable power over producers andsuppliers while also bringing them into daily contact with large numbers, and an increasingly
wide cross section, of consumers. During the past decade the role of the major food retailers
within the food production and distribution system has attracted increasing attention, debateand vocal criticism. The leading food retailers certainly have a high public profile and a
seemingly ever growing physical presence within the retail marketplace. However the
majority of these retailers increasingly recognise the importance of publicly reporting onthe impact their activities have on the environment on society and on the economy via the
publication of annual Corporate Social Responsibility (CSR) and Sustainability reports
As such the UK’s large food retailers are reflecting the fact that reporting on Corporate Social
Responsibility (CSR) and Sustainability has become an increasingly important business
imperative as ‘‘stakeholders are demanding more transparency and companies themselves
are under increasing competitive and regulatory pressures to demonstrate a commitment tocorporate responsibility’’ (CorporateRegister.com Limited, 2008). In a similar vein KPMG
(2011) has suggested that ‘‘corporate responsibility reporting has become the de facto law
for business’’ and that ‘‘companies are increasingly realizing that corporate responsibility
PAGE 130 jCORPORATE GOVERNANCE jVOL. 14 NO. 1 2014, pp. 130-138, QEmerald Group Publishing Limited, ISSN 1472-0701 DOI 10.1108/CG-03-2011-0027Peter Jones is Emeritus
Professor based at the
University ofGloucestershire, Business
School, Cheltenham, UK.
David Hillier is based at theUniversity of Glamorgan,
Centre for Police Studies,
Pontypridd, UK.Daphne Comfort is basedat the University of
Gloucestershire, Business
School, Cheltenham, UK.
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reporting is about more than just being a good corporate citizen; it drives innovation and
promotes learning, which helps companies grow their business and increases theirorganisation’s value.’’ At the same time there is growing awareness within the businesscommunity that independent assurance of the information contained in such reports canenhance companies’ credibility and integrity and influence stakeholders’ perceptions oftheir ethical and moral outlook. In making the case for increasing assurance KPMG (2011),
for example, suggest that ‘‘as corporate responsibility reporting begins to play a larger role
in the way stakeholders and investors perceive corporate value, companies shouldincreasingly want to demonstrate the quality and reliability of their corporate responsibilitydata.’’ With that in mind the aim of this paper is to provide an exploratory review of theemployment of assurance in the most recent CSR/Sustainability reports published by theUK’s top ten food retailers. The paper includes a brief introduction to assurance, an outline ofthe structure of food retailing in the UK, an examination of the extent to which the top ten food
retailers commission assurance as an integral part of their CSRS/Sustainability reporting
process and of the nature and characteristics of this assurance and it offers some initialreflections on the use of assurance by these food retailers.
Assurance
Assurance, simply defined, as a process used to provide confidence as to the degree ofreliance that can be placed on reported data, can be undertaken in a number of ways. CSREurope (2008), for example, identified four principal methods namely ‘‘conducting
assurance internally’’, ‘‘stakeholder panels’’, ‘‘expert input’’ and assurance by an
‘‘independent, impartial and external organisation.’’ In theory conducting assuranceinternally within a company should provide comprehensive access to the relevant data andbe less costly but it may lack credibility especially with external stakeholders. Inviting apanel of stakeholders to produce an assurance statement can have the advantage ofensuring that the process will address those issues important to the invited stakeholders but
such panels may not always represent the full range of stakeholder interests. The use of so
called ‘‘expert input’’ in assurance might be seen to lend what some stakeholders mightregard as authoritative support to a CSR/Sustainability report but doubts may remain aboutthe extent to which such expert(s) have had the opportunity or the necessary access to theprimary data which would allow them to make critically informed judgements.
The most widely used approach to assurance is the commissioning of an assurance
statement by an independent external organisation and such an approach would seem tohave claims to offer credibility, integrity and reliability to the reporting process. An Assurancestatement is defined by CorporateRegister.com Limited (2008) as ‘‘the published
communication of a process which examines the veracity and completeness of a CSR
report.’’ However the production of assurance statements is seen to be problematic in thatnot only is there considerable variation between the volume, character and detail of theinformation companies provide in their CSR/Sustainability reports themselves, but there iscurrently little consensus on how companies should collect, evaluate and report on theirCSR/Sustainability data. In addressing the issue of appropriate data collection
CorporateRegister.com Limited (2008), for example, argued that ‘‘the underlying
processes are often opaque and company specific, so it’s difficult to know how far areport reflects actual performance’’ and that ‘‘unless a company can define its scope ofperformance disclosure, how can an assurance provider define the scope of assurance.’’
That said a growing number of major companies now employ the three interdependent
principles of materiality, inclusivity and responsiveness which are an integral part of theAA1000 Assurance Standard 2008 developed by Accountability (2008), a UK non profitorganisation, to guide and inform their CSR/Sustainability reporting. Materiality is concernedwith whether the issues, impacts and concerns in the CSR/Sustainability report are relevant
and important to stakeholders looking to make informed judgments about the extent to which
a company is discharging its social responsibilities. The principle of completeness focuseson the extent to which both the identification and the communication of material issues andimpacts is fair and balanced. Responsiveness examines the extent to which a company can
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demonstrate that it is responding to stakeholders’ material issues, impacts and concerns. At
the same time it is important to recognise that external assessors work to one of two so called
‘‘levels of assurance’’ namely ‘‘reasonable assurance’’ and ‘‘limited assurance.’’ In theformer ‘‘the assurors have carried out enough work to be able to make statements about thereport which are framed in a positive manner, e.g. the reported environmental dataaccurately reflect’’ (the company’s) ‘‘environmental performance’’ (CorporateRegister.comLimited, 2008). In the latter ‘‘the assurors have only carried out enough work to makestatements about the report which are framed in a negative manner, e.g. Nothing has cometo our attention which causes us to believe that the reported environmental data do notaccurately reflect’’ (the company’s) ‘‘environmental performance’’ (CorporateRegister.comLimited, 2008).
A number of benefits are claimed for the assurance statement. Perhaps most importantly
there is the argument that as a wide variety of stakeholders increasingly share an interest in
how companies are discharging their social, environmental, economic and ethicalresponsibilities so the inclusion of a robust and rigorous assurance statement within aCSR/Sustainability report helps to enhance reliability and credibility (Jones and Solomon,2010). It is also argued that assurance can ‘‘give a boost to (the) internal management ofCSR, since the process of providing an assurance statement will involve an element ofmanagement systems checking’’ in that ‘‘a number of assurance statements identifyshortcomings in underlying data collection systems, thus providing a roadmap forimprovement to the reporting company’’ (CSR Europe, 2008). More commercially theprovision of an assurance statement might be seen to enhance not only a company’sreputation with its stakeholders but also its brand identity within a competitive tradingenvironment.
Frame of reference and method of enquiry
In order to obtain an initial picture of the extent to which the UK’s leading food retailersinclude assurance as an integral part of their CSR/Sustainability reporting procedures, theUK’s top ten food retailers, ranked by market share of sales (see Table I), were selected forstudy. Companies use a wide variety of methods to communicate and report onCSR/Sustainability and the European Commission Directorate-General for Enterprise lists anumber of methods that businesses currently utilise including ‘‘product labels, packaging,press/media relations, newsletters, issue related events, reports, posters, flyers, leaflets,brochures, web sites, advertisements, information packs and word-of mouth’’ (EuropeanCommission Directorate-General for Enterprise, n.d.). During recent years ‘‘the importanceof online communications as part of an integrated CSR communications strategy has grown
significantly’’ (CSR Europe, 2009) and ‘‘sustainability reporting has evolved from a marginal
practice to a mainstream management and communications tool’’ (Global ReportingInitiative, 2007). In a similar vein Bowen (2003) has suggested that the majority of largecompanies have realised the potential of the worldwide web as a mechanism for reporting
Table I Top ten UK food retailers 2011
Company Market share (%)
Tesco 26.9
ASDA 15.2
J. Sainsbury 14.0
The Wm. Morrison Group 10.5The Co-operative Group 5.8
Waitrose 5.3
Marks and Spencer 3.7Aldi 2.2
Lidl 2.1
Spar 2.0
Source : Mintel, 2012
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sustainability agendas and achievements and has argued that its interactivity, updatability
and its ability to handle complexity adds value to the reporting process.
With that in mind the authors undertook an internet search in January 2013, using Google as
the search engine, of each of the top ten food retailers in the UK using the key phrases
‘‘corporate social responsibility report’’ and ‘‘sustainability report’’ This search revealed thatseven of the top ten food retailers (or their parent companies), namely Tesco, Asda(Walmart), J.S. Sainsbury, the Wm. Morrison Group, the Co-operative Group, Marks andSpencer and Waitrose (The John Lewis Partnership) had published CSR/Sustainabilityreports on the internet. The authors then searched the seven CSR/Sustainability reports
using the key word ‘‘assurance.’’ In discussing the reliability and validity of information
obtained from the internet, Saunders et al. (2009) emphasise the importance of the authority
and reputation of the source and the citing of a contact individual who can be approachedfor additional information. In surveying the retailers CSR/Sustainability reports the authorswere satisfied that these two conditions were satisfied.
The material on assurance within the CSR/Sustainability reports was relatively brief, running
at most to two pages, and clearly structured and the authors were able to review andassimilate this information without using sophisticated content analysis that would be moreappropriate in reviewing and analysing larger documents. The information so retrieved
provided the empirical raw material for this paper. The specific examples and selected
quotations on assurance within the CSR/Sustainability reports cited within this paper areused principally for illustrative rather than comparative purposes. The focus being onconducting an exploratory examination of how the UK’s leading food retailers currentlyaddress the assurance within their CSR/Sustainability reports rather than on providing asystematic analysis and comparative evaluation of the current assurance processes. The
authors recognise that they have adopted a narrowly focused, but nevertheless an
appropriate approach, in that, as outlined earlier, the focus of this paper is on offering anexploratory review of the employment of external assurance in the CSR/Sustainability reportscurrently published by the UK’s leading food retailers.
Findings
The findings reveal that seven of the UK’s top ten food retailers namely Tesco, Asda
(Walmart), J. Sainsbury, the W. Morrison Group, the Co-operative Group, Waitrose (John
Lewis), Marks and Spencer all produced CSR/Sustainability reports. The remaining threeretailers namely Aldi, Lidl and Spar, provided only limited information on their approach toCSR/Sustainability on their corporate web sites. Spar, for example simply affirms that it‘‘fulfils its corporate social responsibility by supporting charities, communities and sportsorganisations’’. Four companies, publicly reporting on CSR/Sustainability included external
assurance statements in their reports, while three companies, including two who included
assurance statements, provided some expert input in their CSR/Sustainability reports.Waitrose (John Lewis) reported that ‘‘our co-ownership structure, built on the principles ofopenness and transparency, supports our commitment to open and honest reporting. Wecurrently do not seek formal external assurance for this report.’ Asda (Walmart) reports thatthe data included in it its sustainability report was ‘‘obtained by internal survey and checkswithout the participation of external activity.’’ The remaining three of the top ten food retailers
made no mention of assurance in the limited CSR/Sustainability information they currently
have posted on their corporate web sites.
The external assurance information varies in its coverage and approach and in the character
of the information provided (see Table II). There is marked variation in the scope andcoverage of the reports and while the assurance statement for the Co-operative Group, forexample, covered ‘‘all the key data and claims’’ in the company’s report, that for the Wm.Morrison Group covered ‘‘the principles’’ and the claims for ‘‘five key areas’’, namely‘‘carbon, waste, training and skills, healthy food and supply chain’’, the corresponding
statement for Tesco was focused solely on the company’s ‘‘global direct carbon footprint.’’
The Two Tomorrow’s report employed the AA1000AS standards mentioned earlier inundertaking assurance for Wm. Morrison and the Co-operative Group while Ernst & Young’s
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assurance for Tesco is based on a different three international audit standards. All four
assurance statements provided limited assurance as described earlier. In outlining its
approach to providing limited assurance for Tesco Environmental Resources Management
Limited, for example, reported that they looked to ensure that ‘‘nothing has come to our
attention through the course of our work that the data are materially misrepresented.’’
In addressing the assurance process the assessors generally provided an outline of the
methodology they employed to gather evidence and of the criteria they employed to guide
their judgements. In producing the assurance statement for the Wm. Morrison Group, for
example, they undertook a range of activities including a ‘‘review of current sustainability
issues that could affect Morrisons and of interest to stakeholders’’; ‘‘interviews with selected
directors and senior managers responsible for management of sustainability issues’’; ‘‘site
visits to review processes and systems for preparing site level sustainability data’’ and a
‘‘review of the processes for gathering and collating data.’’ In a similar vein Environmental
Resources Management Limited’s activities in providing assurance for Tesco included face
to face interviews with managers on how carbon data are collected; the testing of the carbon
data measurement, collecting and reporting processes at Group level within the UK and at
selected company operations outside the UK; and providing the findings of its assurance to
management as they arose in order to provide them with an opportunity to correct any data
prior to the finalisation of the assurance statement. The assurance statements produced for
Tesco and Marks and Spencer identified the limitations in the approach adopted. In its
statement for Marks and Spencer, for example, Ernst & Young reported that it had not
interviewed employees at stores or in warehouses’ while Environmental Resources
Management Limited emphasised that if it had been asked to provide reasonable rather than
limited assurance it would have ‘‘needed to conduct more work at corporate and operational
levels.’’
Three of the assurance statements, those provided for the Wm. Morrison Group, the
Co-operative Group and Marks and Spencer, included specific findings and explicitly
address the principles of inclusivity, materiality and responsiveness mentioned earlier. In
addressing the principle of materiality in their assurance statement for the Co-operative
Group, Two Tomorrows reports its belief that the company’s CSR report ‘‘describes the
majority of the Co-operative’s material impacts and, as a whole provides greater
transparency than many others.’’ In addressing the principle of responsiveness within the
Co-operative Group Two Tomorrows reports ‘‘it is particularly encouraging to see the
continuing commitment by the Co-operative to the support of disadvantaged regions and
businesses, particularly small businesses.’’ In outlining its findings on inclusivity in for Marks
and Spencer Ernst & Young report ‘‘we are not aware of any key stakeholder groups that
have been excluded from engagement’’ and ‘‘we are not aware of any matters that would
lead us to conclude that Marks and Spencer had not applied the inclusivity principles in
developing its approach.’’
In addressing materiality in the Wm. Morrison Group’s CSR Review Two Tomorrow’s
assurance statement reports that the company ‘‘has taken steps to identify its materialTable II Characteristics of external assurance
RetailerAssurance
statementExpert
inputDetails of
methodologyReference
to
inclusivityReference
to
materialityReference to
responsivenessOutline of
limitationsRecommendations
for future action
Tesco UU U U
J. Sainsbury U U
The Wm. Morrison
GroupUU U U U U
The Co-operative
GroupUU U U U U U
Marks and Spencer UU U U U U U U
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issues and takes into account stakeholder feedback ‘‘ and in its comment on
responsiveness Two Tomorrows notes ‘‘the summary of commitments and keyperformance indicators together with progress in driving improvements in performance ishelpful.’’ More generally the assurance statements produced for Tesco, the Wm. MorrisonGroup and the Co-operative Group all include a short general summary of findings.Environmental Resources Management Limited concluded that ‘‘Tesco has appropriately
reported its 2011/2012 global direct carbon footprint’’ while Two Tomorrow’s statement for
the Wm. Morrison Group found ‘‘in terms of data accuracy nothing came to our attention tosuggest that the data have not been properly collated from information reported atoperational level.’’
Looking to the future all four assurance statements offer recommendations for improvement
in CSR/Sustainability reporting to their client companies. Ernst & Young, for example,suggests that ‘‘as Marks and Spencer increases its footprint beyond the UK and Ireland itshould consider measuring performance and information from its international operations’’and that it should also ‘‘consider what impact its new business model and associated
operational change will have on its ability to sustain its efforts in areas such as energy
reduction and packaging.’’ Two Tomorrow’s recommended to the Wm. Morrison Group thatfuture CSR reviews should ‘‘describe or provide references to more detailed descriptions ofmethods used to gather and report performance data’’ and that ‘‘next year’s review shouldprovide performance metrics and additional information on the implications of water use atthe company’s manufacturing, retail sites and supplier farms.’’ More narrowly Environmental
Resources Management Limited, suggested that ‘‘Tesco should consider reviewing their
carbon footprint boundary of reporting to include additional indirect greenhouse gasemissions (for example emissions from recycling and disposal of waste’’) and that thecompany ‘‘should strive to improve data collection and reporting for forms of business travelother than rail and air travel.’’
Three companies, namely J. Sainsbury, the Co-operative Group and Marks and Spencer,
included an ‘‘expert opinion’’ in their CSR reports. Jonathan Porritt, The Founder Director ofForum for the Future, provided a one page personal ‘‘commentary’’ as part of theCSR/Sustainability reports produced by Marks and Spencer and the Co-operative Group
while Forum for the Future provided a half page ‘‘expert opinion’’ for J. Sainsbury. In his
commentary for the Co-operative Group Jonathon Porritt emphasised that trust was animportant theme running through the company’s CSR report and he focussed on thecompany’s commitment to young people and education and to its work in promotingsustainable energy. Forum for the Future’s statement on J. Sainsbury’s CSR report claimsthat ‘‘This report brings Sainsbury’s Corporate Responsibility programme to life’’ it argues‘‘the sheer wealth and diversity of activity and initiatives that sit under each of Sainsbury’s
five values are a clear demonstration of Sainsbury’s commitment to Corporate
Responsibility’’ and it suggests that ‘‘despite continued economic uncertainty and theever-price conscious consumer, it’s heartening to see that 2009 saw key strands ofSainsbury’s CR programme go from strength to strength.’’ More specifically Forum for theFuture argues ‘‘when it comes to customers Sainsbury’s takes its commitment to be the ‘bestfor food’ and health very seriously.’’ Having posed the question ‘‘what does sustainable
living really look like for the mainstream consumer?’’. Forum for the Future suggests that
‘‘we’re delighted to see that that Sainsbury’s is serious about finding the answer to thisquestion.’’
Discussion
The findings reveal that a number of the UK’s leading food retailers include some form ofexternal assurance of their CSR/Sustainability reports but the nature, character and scope ofthe external assurance varies and a number of issues merit discussion and reflection. The
leading food retailers approach to assurance can be perhaps best be collectively described
as both idiosyncratic and partial. Idiosyncratic in that the external assessors were givenvarying briefs and they in turn adopted varying approaches and though this is not a problemper se , as CSR/Sustainability reports are themselves voluntary and the accompanying
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assurance statements are not subject to regulation, it means that the lack of a common and
agreed methodology makes any systematic assessment of, and comparison between, the
major players within UK food retailing effectively impossible. Partial in that three of the UK’stop ten food retailers did not post a formal CSR/Sustainability report on the internet, two ofthe seven that posted such reports did not provide any external assurance and of the fivethat did one simply provided an ‘expert input’ and while the other four commissioned anexternal assurance statement these statements offered only limited assurance.
The ‘‘expert opinions’’, included in the J. Sainsbury, the Co-operative Group and Marks and
Spencer CSR/Sustainability reports address general issues, they offer little or nothing byway of supporting evidence, they often lack more critical awareness and there is no explicitsystematic reference to the issues of materiality, completeness and responsiveness. In someways the expert opinion in the J. Sainsbury report, for example, is little more than a marketingstatement seemingly to promote the company’s corporate responsibility programme. Thatsaid Forum for the Future does make two specific, and in many ways fundamental
recommendations. On the one hand it is suggested that the company’s Sustainability report
would benefit from ‘‘a more open discussion of the challenges and dilemmas of takingsustainability seriously’’ focusing, for example, on ‘‘how is Sainsbury’s dealing with issuesuch as high street diversity?’’, and on ‘‘how are Sainsbury’s staff enabled and empoweredto deliver sustainability – from the shop floor – where staff need to be able to help explainwhat sustainably sourced means to customers – to the buying teams- where ethical
standards should be as important as standard procurement criteria.’’ On the other hand
Forum for the future recommends that ‘‘it would be useful to see current performancedescribed alongside future ambition in a more systematic way’’ arguing ‘‘this ambition iscritical, as long term stretch, quantitative targets across all direct and impact areas will meanthat Sainsbury’s keeps making big leaps, and avoids small steps, towards a truly sustainablebusiness.’’ However it is important to note that J. Sainsbury is one of Forum for the Future’sFoundation Corporate Partners and this might be seen by some commentators and critics to
compromise the independence of the external assurance process.
More generally the independence of the assurance process can be a thorny issue. While
Wiertz (2009) has argued that ‘‘in applying external verification to CSR reports, a centralcharacteristic of the assurance process is to be independent of the reporter and the subjectmatter being attested’’, O’Dwyer and Owen (2005) claim that their work on 41 large UK andEuropean companies ‘‘raises question marks regarding the independence of the assurance
process.’’ The external assessors which produced the assurance statements for Tesco, the
Wm. Morrison Group, the Co-operative Group and Marks and Spencer addressed the issueof their independence in different ways. In its assurance statement for the Wm. MorrisonGroup, for example, Two Tomorrows affirms it has ‘‘no other contact with Morrison’s.’’ Ernst& Young, for example, report ‘‘we have provided no other services relating to Marks andSpencer’s approach to social, environmental and ethical issues’’ but do not mention if they
undertake any financial assurance for Marks and Spencer. While Environmental Resources
Management Limited acknowledged that during 2011/2012 it has ‘‘worked with Tesco onother consulting engagements’’ it reported that it ‘‘operates strict conflict checks and wehave confirmed our independence to Tesco for delivering our assurance.’’ More generallyO’Dwyer and Owen (2005) have expressed concern over the ‘‘large degree of managementcontrol over the assurance process’’ arguing that management ‘‘may place any restrictionsthey choose on the assurance exercise.’’
A wide range of stakeholders are taking an increasing interest in the UK’s leading food
retailers’ corporate social behaviour and in theory the external assurance ofCSR/Sustainability reports must be seen to be important for a number of audiencesincluding the general public, customers, investors, employees, suppliers, regulatory bodies,trade unions, non-governmental organisations and pressure groups. While RAAS Consulting(2009) has argued that the two primary audiences are regulators and investors, the
assurance statements contained in the UK’s leading food retailers’ reports give little
indication of their intended audiences. CorporateRegister.com Limited (2008) suggests that‘‘statements are supposedly for external stakeholders, but in practice they’re probably
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written for internal audiences and the language of assurance reduces its appeal to the wider
audience.’’ O’Dwyer and Owen (2005) contrast this approach with ‘‘the governance
structures underpinning the financial audit process’’ arguing that management’s ‘‘
reluctance to address the assurance statement to specific constituencies implies that
they are primarily providing value for management thereby reflecting a perceived demand
for assurance of this information from management as opposed to stakeholders.’’ FurtherO’Dwyer and Owen (2005) conclude that unless this issue is dealt with ‘‘assurance
statement practice will fail to enhance accountability and transparency to organisational
stakeholders.’’
Such reservations and concerns would certainly seem to limit the value of the assurance
process but it is important to note that the UK’s leading food retailers are large, complex and
dynamic organisations, Tesco for example is the UK’s largest private sector employer and
their reach is international and in some cases global. Capturing and storing information and
data across a diverse range of business activities throughout the supply chain in a variety of
geographical locations and then providing access to allow external assurance is a
challenging and a potentially costly venture and one which some of the UK’s leading food
retailers currently seemingly choose not to pursue. Thus while a retailer’s carbon emissions
may be systematically collected, collated and audited as part of the company’s
environmental CSR/Sustainability commitments, information on their contribution to local
communities and levels of staff satisfaction may be more difficult to define, measure and
assure.
While there may be difficulties in collecting and assuring such information within the UK such
problems seem likely to be much greater where UK food retailers are trading and/or sourcing
products and services overseas. Where a company’s data collection and collation systems
are not so developed to realistically allow rigorous assurance processes then limited
assurance may well be the best way forward. At the same time it is important to recognise
that assurance statements come at a cost which includes employee time, scheduling
impacts and the assessor’s fee. Large UK food retailers looking to commission
comprehensive external assurance across the full spectrum of their business operations
will undoubtedly incur substantial costs and they currently seem to choose to make
cost/benefit decisions that favour a more ‘‘limited’’ but deliverable assurance process. More
positively growing awareness that companies which publicise their CSR and Sustainability
activities companies and align them to the company’s image and reputation can add to the
company’s value (Servaes and Tamayo, 2012) suggests that increasing investment in the
recommendations made as an integral part of the assurance process may have much to
commend it.
Conclusion
A number of the UK’s leading food retailers are commissioning assurance as part of their
CSR/Sustainability reporting procedures but there is considerable variation in the nature,
content and scope of the assurance processes undertaken. At best the accent is on
‘‘limited’’ rather than ‘‘reasonable’’ assurance and there are some concerns about the
independence of the assessors and about management control of the assurance process. In
many ways this reduces the reliability and credibility of the food retailers’ CSR/Sustainability
reports. That said the UK’s leading food retailers are large, complex and dynamic
organisations and their supply chains often have a considerable geographical reach and
this makes more rigorous and comprehensive assurance a complex, time consuming and
costly process. Looking to the future growing stakeholder pressure may see the UK’s leading
food retailers commission more rigorous, systematic and wider ranging external assurance.
While the exploratory nature and narrowly defined focus of this paper does not provide a
basis for policy development it does offer a mirror in which the leading UK food retailers
might choose to reflect on their current approaches to the assurance of their
CSR/Sustainability reporting and on stakeholder perceptions of those approaches.
VOL. 14 NO. 1 2014 jCORPORATE GOVERNANCE jPAGE 137
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Verdantix (2008), Competition Hots Up For CSR Assurance , available at: www.verdantix.com/index.cfm/
papers/Press.Details/press_id/4/verdantix-competition-hots-up-for-csr-assurance/-
Corresponding author
Peter Jones can be contacted at: pjones@glos.ac.uk
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