As April draws to a close, many companies are gearing up for their Annual General Meetings (AGMs). According to Article 78 paragraph (2) of Law No. 40 of 2007 on Limited Liability Companies, AGMs must be held no later than six months after the end of the financial year.
Amid the packed schedules of directors and commissioners, there’s still time to refine one of the company’s most important documents: the Sustainability Report (SR)—a key talking point in any AGM.
In line with Article 74 of the same law, the SR is no longer seen as a mere supplement, but as an integral part of a company’s social and environmental accountability. A good sustainability report reflects the company’s long-term commitment to responsible and sustainable business practices.
According to Indonesia’s Financial Services Authority (OJK), 88% of listed companies submitted sustainability reports in the 2022 reporting year. That number jumped to 97% in 2023, representing 873 companies. This upward trend highlights growing awareness of the importance of sustainability reporting.
But for these reports to be truly credible in the eyes of the public and investors, writing them is not enough. They must be backed by assurance—a process conducted by an independent party to verify the accuracy and reliability of the information presented.
Unfortunately, awareness of the importance of assurance in Indonesia remains low. Many companies don’t realise that even the best-written report still needs third-party validation to build trust and reputation.
Globally, assurance has become standard practice—and even considered the minimum requirement—for credible non-financial disclosures. One of the most recognised international benchmarks for assuring sustainability reports is the International Standard on Assurance Engagements (ISAE) 3000, issued by the International Auditing and Assurance Standards Board (IAASB).
ISAE 3000 is designed to ensure the quality and integrity of the assurance process. And it’s not limited to accountants. Professionals from other fields—such as consultants, engineers, and certification bodies—can also use this standard to carry out assurance engagements.
In 2013, IAASB revised ISAE 3000 to explicitly allow qualified non-accountants to apply it. The idea was that public interest would be better served if all competent practitioners—not just accountants—could use ISAE 3000 as a benchmark for their work.
However, to maintain the quality and integrity of the assurance statements issued by non-accountants, IAASB requires users of ISAE 3000 to comply with professional ethics and quality control systems equivalent to international standards, and to clearly disclose these practices in their assurance reports.
Adopting ISAE 3000 signals a company’s commitment to transparency and accountability. A study by Roger Simnett and colleagues, “Evaluating the Use of International Standards for Assurance Engagements by Non-accounting Practitioners,” found that non-accountants using ISAE 3000 actually produced higher-quality assurance reports, particularly in terms of methodology disclosure, independence, and quality control.
This is an important signal for stakeholders that the assurance process was taken seriously—not just a box-ticking exercise. On the other hand, when practitioners use weaker standards, transparency in the reports drops significantly.
Why is this transparency so vital? Because sustainability reporting lacks the strict standardisation of financial reporting. With a wide range of topics and approaches, assurance is often the only way to ensure the information is truly trustworthy and aligns with best practices.
Interestingly, assurance isn’t just beneficial for readers of the report. It also benefits the assurance providers themselves. Using ISAE 3000 boosts their market reputation and credibility, and can even expand their market share. When a report explicitly states that it was assured using ISAE 3000, it acts like a “seal of seriousness”—a clear signal that the company is truly committed to sustainability.
This context becomes even more important when we consider the shifting public policy landscape, which increasingly expects the private sector to play a stronger role in achieving sustainable development goals. Through various regulations, the Indonesian government has made it clear that companies can no longer ignore environmental and social responsibilities. In the long run, businesses that fail to show a serious commitment to sustainability will fall behind—both in terms of public trust and access to capital.
That’s why, as companies prepare for AGMs and finalise their annual reports, decision-makers should seriously consider getting their sustainability reports assured. Assurance shouldn’t be seen as just another expense—it’s a strategic investment in reputation and credibility.
It’s time for Indonesian companies to go beyond just auditing their financials. They need to give equal attention to the quality and credibility of their sustainability reports.
By engaging qualified assurance providers and using ISAE 3000 as the benchmark, companies can ensure that their sustainability message is stronger, clearer, and more trustworthy. After all, trust is the most valuable social capital for building a sustainable future.
