A/HRC/4/35 page 23 78. The concept of materiality refers to the content of company reporting - whether it conveys information that really matters. The number of firms reporting their social, environmental and human rights profiles, called “sustainability reporting”, has risen exponentially.61 But quality has not matched quantity. Far fewer companies report systematically on how their core business strategies and operations impact on these sustainability issues. Instead, anecdotal descriptions of isolated projects and philanthropic activity often prevail. Moreover, only a handful of companies combine social and financial reporting, despite the fact that the former has sustainability implications for the latter.62 The GRI provides standardized protocols to improve the quality and comparability of company reporting, but fewer than 200 firms report in accordance with GRI guidelines, another 700 partially do so, while others claim to use them informally.63 79. Assurance helps people to know whether companies actually do what they say. A growing proportion of sustainability reports (circa 40 per cent) include some form of audit statement, typically provided by large accounting firms or smaller consultancies.64 Two global assurance standards have emerged, one giving companies more control over what is assured (called ISAE3000), and the second empowering the assurance provider to consider stakeholder concerns in determining what is material and therefore should be included in public reports (AA1000AS).65 Both standards help the public determine whether the information reported is reasonably likely to be accurate, based on such factors as the quality of the management, monitoring, data collection, and other systems in place to generate it, as well as its materiality. A growing but still small fraction of the largest companies use these standards. 61 Some estimates range as high as 3,000. “Trends in non-financial reporting”, Global Public Policy Institute, Berlin, Research Paper Series, No. 6 (2006), available at http://gppi.net/fileadmin/gppi/nonfinancialreporting01.pdf. But the trend appears to have levelled off, perhaps reaching a saturation point. 62 The United Kingdom adopted a new company law in November 2006, which will require large listed companies to include, as part of their directors’ report, information on environmental matters, employees, social and community issues and “essential” business partners. Information must be provided “to the extent necessary for an understanding of the development, performance and position of the company’s business”. Companies Act 2006, Section 417 (5). 63 As of August 2006, data provided by GRI. 64 Association of Chartered Certified Accountants and CorporateRegister.com, “Toward Transparency: Progress on Global Sustainability Reporting, 2004”; and “KPMG International Survey of Corporate Responsibility Reporting, 2005” (both on file with the Special Representative). 65 International Auditing and Assurance Standards Board ISAE3000, and AccountAbility AA1000AS.