Companies are part of society in which they are performing their business
activities, so, in addition to achieving their economic goals, they must take into account the
impact of their activities on the environment and society as well, which means that, it is
necessary to act in a socially responsible and acceptable way, and thus accomplish certain
benefits. Due to the obvious changes in the natural environment (e.g. climate change and its
consequences, water shortages, air pollution, degradation of ecosystems and ozone layer
depletion) and the material effect of the global “life-style” on the environment, there has been
an increasing awareness in a lot of countries and societies that the environment and its
resources are the major elements that are crucially necessary for the future of mankind. This
growing awareness has led on the one hand to the regulatory activities of national and
international institutions and on the other hand to the public concerns about environmental
issues. As a consequence the concept of “sustainable development” of society was broadly
and globally accepted as a core of national and international policy in the early 90-ies of the
last century. This more or less global commitment and conviction has, besides other aspects,
also drawn attention to the impact of companies` business activities on the environment and
the society and has led to the concept that the value of a company should not only be
measured according to its financial performance but also to its environmental and social
performance of the business, including the positive and negative impacts on the natural and
social environment. This performance concept is referred to as the triple bottom line
performance and is increasingly considered by the major stakeholders of companies (such as
capital provider, suppliers, customers and society in general). Companies need to respond to
the expectations of their stakeholders so that they will include the impacts of their business
activities on the environment and society in their strategic and operative management
systems, as well as their decision making process and their system of external financial and
non-financial reporting. Including of these effects in the system of external financial and nonfinancial
reporting, i.e. the expansion of the traditional model of external financial reporting
with non-financial information is of particular importance, because corporate reporting is
crucial for the evaluation of the company by its stakeholders and therefore for its future
(financial) success. Information about environmental aspects of the business were firstly
disclosed as a part of the annual report, then shortly as a part of the so-called social reporting,
then in the form of a standalone environmental report, sustainability report, and recently
within an integrated report. In order to define content and form of the above mentioned
reports a number of guidelines and regulatory requirements for reporting have been
developed by European and international organizations and institutions. At the EU level
particularly important are Eco-Management and Audit Scheme (EMAS) established by the
European Commission, European Commission Recommendation on the recognition,
measurement and disclosure of environmental issues in the annual accounts and annual
reports of companies, certain Directives of the European Commission as well as Proposal of
an environmental reporting framework issued by Federation of European Accountants, while
at the global level Sustainability Reporting Guidelines established by Global Reporting
Initiative (GRI) and International Integrated Reporting Framework issued by International
Integrated Reporting Council (IIRC) are the most comprehensive guidelines for
sustainaibility reporting. In order to improve credibility and quality of disclosed information
about environmental (and wider social) aspects of the business, it is important to conduct an
audit or assurance of sustainability reports depending on the reporting form, which also
caused the development of certain standards such as International Auditing Practice
Statement 1010, International Standard on Assurance Engagements (ISAE) 3000 and
AA1000 Assurance Standard. While at the EU level and around the world a lot has already
been done regarding this matter, and the sustainability reporting level in the world is
constantly increasing, for companies which are operating in the Republic of Serbia this
reporting concept is the relative novelty, considering that the most of our companies are still
trying to find their interest in this area and to become familiar with the sustainability
reporting guidelines, reporting methods as well as with the significance of the assurance