AA1000 Assurance Standard

Primary purpose
Summary
Potential benefits
Who can use the tool?
What resources are needed?
Development, ownership and support
Third sector examples
Footnotes

Primary purpose

The AA1000 Assurance Standard (AA1000 AS) is a standard for assessing and strengthening the credibility and quality of an organisation’s social, economic and environmental reporting. It is primarily intended for use by external auditing bodies that assure an organisation’s reports or social accounts (Assurance Providers) but can also be used to guide any organisation when building its accountability processes, systems and abilities .1

Stakeholder engagement is central to the AA1000 AS.2 Within organisations it is used as a means of driving overall performance through innovation and learning. ‘Quality’ in terms of the AA1000 AS is the degree to which a reporting organisation is open, engaging and responsive to stakeholder perceptions and expectations.

AA1000 AS is built on two beliefs. First, that accountability processes need to be tailored to identify, understand and respond to issues that are specific to diverse organisations, sectors, stakeholders and strategies.3 Secondly, that robust, good quality stakeholder engagement processes can powerfully inform internal decision making and enable learning and innovation and thus improved performance.

AA1000 AS was created by the not-for-profit professional institute, AccountAbility, which offers assurance-related services to its members through working in partnership.

Summary

AA1000 AS is a non-prescriptive, free, open-source standard that originated as part of the ‘social accounting and auditing’ movement (see Social Accounting). Key features of AA1000 AS are:

  • An overarching principle of ‘inclusivity’, known as ‘the accountability commitment’, which underpins three principles – materiality, completeness and responsiveness.4
  • Public assurance statements.
  • Requirement of disclosure by assurance practitioner about their independence (impartiality) and competencies.

Since its inception in 1995, AccountAbility has taken an approach to quality focused on the interests of the stakeholder, or those impacted by the organisation. For business, this would include employees and owners, as well as those stakeholders who historically have had little influence over decision-making and yet are impacted, often profoundly, by business activities.

The AA1000 series defined this in terms of the principle of ‘inclusivity’ understood as the right of stakeholders’ interests to be heard, and that organisations account for themselves in relation to these interests. AA1000 AS distilled this into an ‘accountability commitment’ and three, related, core over-arching principles: materiality, completeness and responsiveness. Of these, the most significant is ‘materiality’, defined in terms of stakeholder interests.

The Materiality Principle requires the organisation to include in its report information about its social, environmental and economic performance required by its stakeholders for them to be able to make informed judgements, decisions and actions. It focuses on what is important to stakeholders, as well as what is important to the organisation. Information is ‘material’ if its omission or misrepresentation in the report could influence the judgments, decisions and actions of an organisation’s stakeholders.

In addition, the Completeness Principle requires an organisation to be able thoroughly to identify and understand the material aspects of its sustainability performance. Its main message can be summarised as measuring the right things in the right way.

The Responsiveness Principle requires an organisation to provide evidence that it has coherently responded to stakeholder concerns, policies and relevant standards – this includes public response but also management of identified material issues i.e., improving performance.

All AA1000 principles must be applied by any organisation wishing to use the Standard. The manner in which they are applied depends on the level of assurance pursued and the context and resources of the organisation using them. Assurance levels may depend on the extent and quality of a number of issues:5

• Available information.
• Quality of evidence.
• Maturity of the accountability systems and processes.
• Internal assurance systems.
• Existing assurance for specific aspects of performance reporting.
• Resources allocated for assurance by the reporting organisation.
• Legal or commercial constraints.
• Competencies of the assurance practitioner.

The level of assurance is expected, although not required, to increase over time as information and underlying systems and processes for accounting for performance mature.

Potential benefits

  • AA1000 AS provides a holistic standard for assessing that an organisation’s social accounts/reports systematically address the appropriate range of performance and social, environmental and economic impacts.
  • The AA1000 AS seeks to echo stakeholders’ concerns and highlight whether these have or have not been addressed by an organisation.
  • It seeks to instil a culture of continuous development through stakeholder responsiveness.
  • It is flexible to be used by different types and sizes of organisations from diverse backgrounds and over a range of time frames.
  • It supports and integrates other tools such as the Global Reporting Initiative Guidelines, SA8000, SIGMA and the ISO Series.
  • It seeks to facilitate learning rather than designating ‘failure’ against a prescriptive set of standards.

Potential limitations

  • AA1000’s strength as a process assurance standard can also be a limitation if an organisation runs through the planning, accounting, auditing and reporting work without fundamentally improving its performance and impacts. Organisations need to be committed to acting on stakeholder concerns and suggestions by the Assurance Provider.
  • It provides assurance as to the quality of an organisation’s accountability processes but does not provide accreditation or a ‘pass mark’.
  • It has the potential to be quite labour intensive for some social enterprises and may involve unfamiliar language.
  • External Assurance Providers have the potential to be expensive for some organisations although they focus on what really matters i.e., what is material before applying high-level assurance to keep costs lower.

Who can use AA1000 AS?

  • While the Standard is designed primarily for Assurance Providers in guiding the manner in which they provide assurance, any organisation can use the tool, regardless of size, sector or location.

What resources are needed?

Leadership

For an organisation using the Standard to guide its work and reporting, an individual or team can lead on the work, but the inclusion and commitment of the organisation’s management levels are needed. Stakeholder engagement guided by the Standard will benefit from having all staff involved.

Proficiencies or skills

It is helpful if someone has had experience in social/economic research methods, particularly concerning stakeholder engagement.

Staff time

Significant time will be required to compile, analyse and write up information and implement action, although some flexibility exists depending on how much assurance an organisation wishes to give and how it is interpreted.

Courses, support, and information

The AA1000 series consists of the AA1000 Framework plus an evolving programme of specialised modules, including the AA1000 AS. A range of materials and forums supports the AA1000 series:

  • Guidance notes provide more detailed guidance to support all users of the AA1000 series.
  • A number of publications and research reports directly related to AA1000 Series are available for all users.
  • AccountAbility, in partnership with the International Register for Certificates Auditors (IRCA), launched the first international Certified Sustainability Assurance Practitioner (CSAP) programme, which provides the first multistakeholder-defined professional competency framework in this area (built on an AA1000 platform) and supports harmonisation by providing practitioners with a basis for benchmarking and individual certification.
  • AccountAbility provides tailored or general training.

The AA1000 Framework also supports and complements AA1000 AS and 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 (see Social Accounting). It can be downloaded free of charge from www.accountability.org. The site contains an extensive range of free reports, briefings, case studies and other information on AA1000 AS, including the AS1000 principles (APS), Stakeholder Engagement Standards (SES) and further accountability research. The AS1000 AS is also included in the SIGMA Guidelines toolkit and is designed to complement the Global Reporting Initiative Guidelines.

Development, ownership and support

AA1000 AS is available on a non-proprietary basis for members and non-members. AccountAbility requests only that the knowledge gained through its use be freely shared to maintain an ongoing, open-source process of learning from experience, revisions and upgrades to AA1000 AS.

The AA1000 series is part of a larger system, resting on a multi-stakeholder governance structure, including AccountAbility members, a technical committee, and council and operating board. Developing the AA1000 series is an ongoing task, continuously subject to refinement and additions reflecting latest developments and feedback from stakeholders.

Third sector examples

  • The Co-Operative Bank
  • Traidcraft
  • FRC Group
  • Landcare Rsearch (Manaaki Whenua)

Examples from other sectors

  • BP
  • Camelot Group PLC
  • Guardian Newspaper Unlimited
  • Halifax Bank of Scotland


1 The AA1000 AS (2003: 5) defines assurance as, ‘an evaluation method that uses a specified set of principles and standards to assess the quality of a Reporting Organisation’s subject matter, such as Reports, an the organisation’s related systems, processes and competencies that underpin its performance. Assurance includes the communication of the results of this evaluation to provide credibility to the subject matter for its users.’

2 AccountAbility defines stakeholders as ‘those individuals and groups that affect and/or are affected by the organisation and its activities’. The AA1000 Framework details how an organisation can map its stakeholders, and build a systematic process of stakeholder engagement. Accountability have created materials and packages of support to help organisations build effective approaches to stakeholder engagement. See www.accountability.org for more details.

3 The AA1000 Series defines ‘accountability’ as consisting of: “Transparency: to account to ones stakeholders. Responsiveness: to respond to stakeholder concerns. Compliance: to comply with standards to which one is voluntarily committed, and rules and regulations that one must comply with for statutory reasons. These aspects of accountability may in practice have very different drivers, including legal compliance, stated policy commitments, reputation and risk management, and the company’s sense of moral and ethical duty.” (AA1000 AS, 2003:33).

4 Organisations adopting the AA1000 AS commit themselves to the practice of ‘inclusivity’. In brief, this means an organisation’s commitment to identify and understand its performance and impact and associated views of its stakeholders, its commitment to consider and coherently respond to the aspirations and needs of its stakeholders, and its commitment to provide and account to its stakeholders. For more information see www.accountability.org.

5 This list does not represent a hierarchy of assurance.

 

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