
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.