2023 has seen several key developments in the progression of sustainability reporting standards.
Most notably IFRS S1 and S2 have been released heralding the launch of what is expected to be a series of sustainability-focused international reporting standards.
Although there is no strict requirement for sustainability reporting to be assured per IFRS S1 & S2, other sustainability frameworks require assurance, and many entities will choose to have their sustainability information reviewed to give the users more confidence in their disclosures.
Therefore, in much the same way as the International Standards on Auditing (ISAs) provide a key background for assurance of financial information across the globe, it is vital that there is an international framework for the assurance of sustainability disclosures.
Currently in the exposure draft stage, ISSA 5000 provides the proposed general requirements for Sustainability Assurance. This is expected to be the first in a series of standards covering the different elements of sustainability.
The standard has been drafted based on ISAE 3000 (assurance engagements other than audits or reviews of historic financial information) and ISAE 3410 (assurance engagements on greenhouse gas statements).
ISSA 5000 is a general requirement standard and therefore, may appear to miss out on a lot of the detail that may be expected. Standards expected to cover the additional detail are expected moving forward. However, ISSA 5000 does cover the key requirements covering the process of sustainability reporting from first engaging a client through to generating the report.
ISSA 5000 is intended to be ‘framework-neutral’ and therefore its application is not limited to the framework provided by the IFRS Ss. It can be used to assure other sustainability reporting frameworks and entity-developed measures.
ISSA 5000 can also be applied to all different sustainability topics – (Environmental, Social, and Governance).
ISSA 500 covers different levels of assurance, for example, both limited and reasonable. It does helpfully describe the different requirements using a simple annotation system.
The standard is also designed to be used by all assurance practitioners, professional accountants, and other assurance practitioners.
The standard is also designed to be ‘user-agnostic’ i.e., can be used to assure all types of sustainability information, independent of who the audience is.
Creating an assurance standard for sustainability is no easy feat. ISSA 5000 is very much a general requirements standard, with a lot of detail to follow from the release of future standards. However, this is a decent starting point, covering many of the basic requirements of an assurance standard. It also does a good job of covering limited and reasonable assurance in a simple manner.
This is the first installment in the much-needed series of sustainability assurance standards.
It provides a good outline of the general requirements.
The exposure draft is out for consultation until Friday 1 December, with a proposed effective date expected to be for periods beginning on or after 15 December 2026 or another date in 2026.
Further information can be found here.
