Reasonable Assurance: Philips Puts Data Scrutiny First

Overview

Philips, the global health technology company, conducts robust, evidence-based materiality analysis using Datamaran and embeds the results in an integrated report subject to reasonable assurance from auditors — the same rigor long applied to financial data.

Challenge

Philips wanted to apply the same rigor to non-financial data as it does to financial data, to build stakeholder trust and prepare for mandatory ESG disclosure rules on the horizon.

Solution

Philips embedded ESG data, including its materiality analysis, in an integrated report and gave auditors full visibility into the results, process, and raw data behind how material topics were determined — described internally as "a reliable, traceable and systematic solution." Philips selected EY, which already audits its financial reporting, rather than bringing in a separate assurance provider.

As Braaksma explains, "You can only have reasonable assurance if you have good internal controls. You need a good internal control framework and processes." Every data point traces back to its source, and the process aligns with standards including AA1000AS and ISAE3000.

Impact

Philips redesigned its processes and strengthened internal controls over ESG data, building what the team describes as "a streamlined, evidence-based and auditable materiality analysis process and matrix." As Braaksma puts it: "What we now have with Datamaran is a process that is not only extremely auditable but also provides far deeper insight than relying on input from stakeholder engagement sessions."

Philips's 2021 annual report describes the approach directly: by applying Datamaran's automated sifting and analysis of millions of data points from public sources — corporate reports, regulation, voluntary initiatives, and news — Philips identified its material topics, incorporating a wider range of data and stakeholder voices than before.

An Auditor's Perspective

EY, Philips's auditor, noted: "Philips is indeed at the forefront of integrating sustainability into business-as-usual. Having its sustainability data reasonably assured is a testimony of Philips' commitment. Datamaran has certainly facilitated the assurance process by providing a proper audit trail."

Looking Ahead

With ESRS mandating limited assurance for many companies from 2024 and moving toward reasonable assurance over time, Philips's early investment in an auditable, Datamaran-powered process leaves it well prepared. As Braaksma says: "For many years, we had anticipated that assurance for ESG would transition into the regulatory space. As such we're well prepared."