All companies in scope for CSRD are required to obtain limited assurance from a third-party assurance provider from their first reporting year. This introduces a more robust approach to the assurance of sustainability information and will involve companies obtaining assurance over their compliance with the European Sustainability Reporting Standards (ESRS), their underlying materiality assessment process, EU Taxonomy Regulation, and the digital tagging of sustainability information.

The conclusions should be based on a limited assurance engagement, with reasonable assurance foreseen once feasible. The CSRD also includes a provision to move towards reasonable assurance. The CSRD requires the Commission to adopt limited assurance standards before 1 October 2026. By 1 October 2028, following a feasibility assessment, the Commission shall adopt reasonable assurance standards and specify when reasonable assurance is required. In the interim, while the Commission has not adopted an assurance standard, member states may apply national assurance standards, procedures or requirements.

In June 2023, the International Auditing and Assurance Standards Board (IAASB) launched a consultation for a new standard (ISSA5000) that would apply to sustainability information reported across any sustainability topic and prepared under multiple frameworks, and be suitable for limited and reasonable sustainability assurance engagements. The final standard is expected later in 2024. As of yet no decision has been made by the EU to adopt ISSA5000.

The CSRD requires the statutory auditor to express a conclusion on the sustainability reporting. Member states may allow an independent assurance services provider (IASP), other than the statutory auditor, to provide this assurance, in line with the standards adopted by the Commission. IASPs are also required to follow equivalent requirements to those set out in the EU legal framework for statutory audit, including on professional education, quality assurance and ethical requirements.

The CSRD requires statutory auditors to meet specific educational requirements in addition to those set out in the Statutory Audit Directive. In addition to eight months of related practical training, the test of theoretical knowledge will need to cover:

• Legal requirements and reporting standards relating to the preparation of annual and consolidated sustainability reporting
• Sustainability analysis
• Sustainability due diligence processes
• Legal requirements and assurance standards for sustainability reporting

Grandfathering arrangements for statutory auditors qualified before 1 January 2024 are foreseen.

Independence considerations are essential for maintaining trust in sustainability reporting. Companies must consider independence across several key areas to enhance the reliability and credibility of their disclosed information. This includes ensuring the Board and Audit Committees have enough independent directors appointed to provide independent oversight and unbiased decision-making. The Audit Committee should oversee the audit process, including the appointment of independent and objective sustainability assurance providers, avoiding familiarity threats that could compromise independence. Furthermore, companies should transparently disclose any relationships or connections that could impact independence. This includes relationships with auditors, board members, and assurance providers.

• ICAEW and WBCSD Joint Publication – Buyer's guide to assurance on non-financial information
• ICAEW – Limited assurance vs reasonable assurance
• Accountancy Europe – CSRD factsheet
• Accountancy Europe – FAQs on sustainability information assurance