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ACCA Applied Knowledge · Business and Technology · Sustainable business practices

Lakeside Foods publishes an annual report showing its carbon emissions, water use and employee injury rates, and has these figures reviewed by an independent firm. What is the main benefit to stakeholders of the independent review?

The main benefit is greater credibility. Independent assurance over sustainability data gives stakeholders confidence that the reported figures are reliable and not misleading, which reduces the risk of greenwashing. It does not guarantee improved future performance, replace internal controls or influence the company's tax position.

  1. AIt guarantees that emissions will fall next year
  2. BIt increases the credibility of the reported informationCorrect
  3. CIt removes the need for internal environmental controls
  4. DIt ensures the company pays lower taxes

Explanation

Independent assurance gives stakeholders confidence that sustainability data is reliable and helps counter greenwashing. It does not guarantee future performance, replace internal controls, or affect tax.

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