Challenges in the completeness of Scope 3 sustainability reporting: An auditor's perspective under the CSRD framework

Abstract

The thesis explores the challenges auditors face in ensuring the completeness of sustainability data within Scope 3 emissions under the new Corporate Sustainability Reporting Directive (CSRD). The study aims to identify these challenges and shed light on the implications of the introduction of the CSRD framework. This research adopts a qualitative methodology, utilizing semi-structured interviews with seven sustainability auditors and The Norwegian Institute of Public Accountants (Revisorforeningen), who are experts in the field. The analysis is presented thematically and organized according to key categories, deriving insights into the auditors' experiences and challenges. Our study reveals challenges with completeness in Scope 3 sustainability reporting, mainly due to low competence within reporting companies and their value chains. Due to its recent implementation, auditors lack experience regarding the CSRD framework. Auditors face difficulties ensuring the completeness and accuracy of Scope 3 data, which is often incomplete due to complex value chains and insufficient transparency. The main limitation of this study is driven by the short history of the CSRD framework, which takes effect in the fiscal year 2024. This results in a lack of historical data and established practices for auditors to draw upon, making it challenging to fully assess the directive's implications and challenges. Another limitation is the reliance on a small sample of auditors, which may only partially represent the broader experiences of all auditors affected by the CSRD. We believe our findings offer valuable insights for professionals engaged in sustainability reporting, contributing to a deeper understanding of forthcoming challenges faced by companies and sustainability auditors. The study can help enhance the comprehension of the challenges related to the completeness in Scope 3. Consequently, this study can serve as a starting point for establishing robust systems and necessary competence development to enable accurate and reliable sustainability reporting.