Dr. Md Safiullah and A/Professor Dr. Tarek Rana, RMIT University, Australia

 

Sustainability assurance has attracted increasing attention from regulators, investors, and civil society across the world. With a new government now in place, Bangladesh stands at a critical point in its development trajectory. Over the past decades, economic expansion has lifted millions out of poverty and strengthened the country’s export-oriented industries. Yet the benefits of this growth have been uneven, and many communities have not fully shared in its gains. At the same time, these patterns of unequal development have intensified social and environmental pressures. Dhaka, one of the most densely populated capital cities in the world, faces severe air pollution, contaminated rivers, unmanaged industrial waste, and growing exposure to climate-related risks that threaten livelihoods and urban wellbeing. The central challenge, therefore, is not whether economic development should continue, but how it can proceed in ways that are environmentally responsible and socially sustainable. In this context, corporate sustainability assurance should not be viewed as a technical add-on; rather, it represents an essential governance and accountability mechanism to ensure that economic growth remains aligned with long-term societal interests.

 

What Is Sustainability Assurance?

Sustainability assurance refers to the independent verification of a company’s environmental, social, and governance (ESG) disclosures. Many corporations now publish reports describing their carbon emissions, energy consumption, labour practices, community engagement, and governance arrangements. These reports are intended to demonstrate how firms manage their broader responsibilities beyond financial performance. However, without independent verification, such disclosures may be incomplete, inconsistent, or difficult to compare.

 

Assurance introduces an external and impartial evaluation of the information presented in sustainability reports. Independent professionals—often auditors or specialist assurance providers—review the underlying data, internal systems, and reporting processes to determine whether the disclosures are reliable and prepared in accordance with recognised international frameworks, such as the Global Reporting Initiative (GRI) or the standards issued by the International Sustainability Standards Board (ISSB). In practical terms, assurance strengthens the credibility of sustainability reporting. It reassures investors, regulators, and the public that the information being disclosed reflects actual performance rather than promotional claims.

 

Without assurance, sustainability reporting risks becoming little more than a public relations exercise. In countries where regulatory oversight and public trust in corporate reporting remain evolving, assurance can play an important role in strengthening confidence and transparency.

 

Why Bangladesh Needs It?

Bangladesh is widely recognised as one of the most vulnerable countries to climate change. Rising sea levels, cyclones, salinity intrusion, and extreme heat events threaten agriculture, infrastructure, and public health. At the same time, rapid industrialisation, particularly in sectors such as textiles, leather, cement, and energy places increasing pressure on air and water quality.

 

The ready-made garment (RMG) sector illustrates both the opportunities and the challenges associated with Bangladesh’s development model. Contributing more than 80 percent of national export earnings, the sector is a major driver of employment and economic growth. Yet the 2013 Rana Plaza disaster exposed the human cost of weak oversight and insufficient accountability in industrial practices. In response, initiatives such as the Accord on Fire and Building Safety in Bangladesh introduced stronger monitoring and compliance mechanisms. These reforms significantly improved workplace safety.

 

Sustainability assurance can extend this progress beyond workplace conditions to ESG performance more broadly. By independently verifying data on emissions, energy use, labour conditions, and governance practices, assurance shifts corporate behaviour from reactive crisis management toward proactive risk management and long-term responsibility.

 

At present, many companies voluntarily disclose ESG-related information. However, without assurance, stakeholders, including investors, regulators, consumers, and communities, cannot fully rely on the accuracy of such information. The risk of “greenwashing”, where environmental claims are overstated or misleading, remains significant. Sustainability assurance provides a mechanism to validate these claims. Independent verification ensures that sustainability commitments are supported by credible data and measurable performance.

 

Stronger corporate accountability can also have tangible effects on urban living conditions. When companies know their environmental data will be independently reviewed, they are more likely to invest in cleaner technologies, effective waste treatment, and responsible resource management. Over time, these improvements contribute to cleaner air, safer water systems, and healthier urban environments—outcomes that are particularly important for densely populated cities such as Dhaka.

 

Economic Competitiveness and Global Investment

Global financial markets increasingly incorporate ESG performance into investment decisions. Institutional investors now routinely assess environmental and social risks when allocating capital. Similarly, multinational buyers, particularly in the apparel and manufacturing sectors, expect suppliers to provide credible and verifiable sustainability information.

 

For Bangladesh, this shift carries significant implications. As the country prepares to graduate from Least Developed Country (LDC) status, maintaining international competitiveness will require more than low production costs. Demonstrating responsible ESG practices will become increasingly important for sustaining export relationships and attracting foreign investment.

 

Sustainability assurance can serve as a strategic tool in this transition. Verified sustainability data signals that companies meet international expectations regarding transparency and accountability. This credibility can improve access to international markets, strengthen relationships with global buyers, and facilitate access to green finance and sustainability-linked investment funds.

 

The Role of Regulators and Professional Institutions

Embedding sustainability assurance into corporate practice requires coordinated action across multiple institutions. Regulators, professional bodies, and educational institutions each have an important role to play.

 

The Bangladesh Securities and Exchange Commission (BSEC) and the Financial Reporting Council (FRC) could progressively introduce mandatory ESG disclosure requirements for listed companies. Clear regulatory expectations would encourage firms to adopt consistent reporting practices and strengthen transparency within capital markets.

 

Professional organisations, particularly the Institute of Chartered Accountants of Bangladesh (ICAB) and the Institute of Cost and Management Accountants of Bangladesh (ICMAB), can support this transition by developing assurance guidelines and training programs for auditors and assurance professionals. Building professional expertise is essential for ensuring that sustainability assurance is conducted with rigour and independence.

 

Universities also have a critical role in preparing the next generation of professionals. Integrating sustainability reporting and assurance practices into accounting and business curricula can help develop a skilled workforce capable of supporting the country’s evolving governance needs.

 

Aligning local practices with internationally recognised standards will ensure that Bangladesh remains competitive in global markets while simultaneously strengthening transparency and ethical corporate behaviour domestically.

 

Learning from International Developments

Bangladesh can draw valuable lessons from countries that have recently strengthened sustainability disclosure and assurance frameworks. Australia provides a relevant example. Beginning in January 2025, large Australian companies are required to include climate-related financial disclosures alongside traditional financial statements. These disclosures must be subject to independent assurance under new standards such as ASSA 5000.

 

Importantly, the Australian framework adopts a phased approach. Initially, companies are required to obtain limited assurance over key climate disclosures, with requirements gradually expanding toward full reasonable assurance by 2030. The framework is supported by legally enforceable obligations, which enhances transparency and accountability regarding emissions, climate risks, and governance practices.

 

This structured approach has strengthened investor confidence and improved the reliability of corporate climate disclosures. A similar phased framework could help Bangladesh develop a credible sustainability assurance system while allowing companies time to build the necessary reporting capacity.

 

Where and how should it begin?

Introducing sustainability assurance across all businesses simultaneously would be unrealistic. Small and medium-sized enterprises (SMEs) often lack the financial and technical resources required to produce detailed ESG reports or to undergo assurance processes. Consequently, a gradual and targeted approach is more practical.

 

Implementation could begin with large, listed companies and industries with significant environmental and social impacts, such as textiles, energy, leather processing, and manufacturing. These sectors already face considerable scrutiny from international buyers and investors, making them suitable starting points for enhanced transparency.

 

Government incentives can further encourage adoption. Tax benefits, preferential access to green financing, and public recognition for responsible corporate practices can motivate firms to invest in sustainability reporting and assurance systems. In addition, technical assistance programs supported by international development partners can help companies build the necessary capacity.

 

Moving Toward Responsible Growth

Ultimately, sustainability assurance offers a practical mechanism for aligning corporate behaviour with national development priorities. By verifying ESG disclosures, assurance strengthens transparency, improves accountability, and enhances investor confidence.

 

For Bangladesh, the benefits extend beyond corporate governance. Reliable sustainability information can support cleaner industrial practices, healthier urban environments, and more resilient economic growth. As the country continues its development journey, embedding sustainability assurance into corporate practice can help ensure that economic progress does not come at the expense of environmental integrity or social wellbeing. In this sense, sustainability assurance is not simply about verifying corporate reports. It is about ensuring that development remains responsible, transparent, and aligned with the long-term interests of society.