Engaging with sustainability assurance

The sustainability reporting ecosystem has been through a fast-moving period of change. Recent developments include a new standard for sustainability assurance engagements (ISSA 5000), from the International Auditing and Assurance Standards Board (IAASB) and new International Ethics Standards for Sustainability Assurance (the IESSA) from the International Ethics Standards Board for Accountants (IESBA), hot on the heels of new European Sustainability Reporting Standards (ESRS) and International Financial Reporting Standards for sustainability-related disclosures (IFRS S1 and IFRS S2).

Over the past few years there have been many moving parts and emerging developments to keep track of and understanding how some of these standards interact has not always been straightforward. “I think the way the IAASB and IESBA have worked together on ISSA 5000 and the IESSA has been a real boon in terms of outcomes,” said Paul Winrow, Partner, Public Policy and Regulation, at Forvis Mazars and Chair of the ICAEW Non-Financial Reporting Assurance Committee, who chaired an ICAEW event on the New International Standards for Sustainability Assurance from these two boards. 

The same but different

Building on their existing models, practices and standards while coordinating closely – as they developed ISSA 5000 and the IESSA – has helped both boards to deliver a well-coordinated and aligned package of requirements that work together in a clear way, explained Mark Babington, IESBA member. “When we use a term to describe something in the assurance standard and in the ethics and independence standards, we now use the same term. When we use a definition, we use the same definition.” This will help those conducting assurance engagements – and users of the resulting assurance reports.

Auditors that have been using long established International Standards on Assurance Engagements (ISAE) from the IAASB, such as ISAE 3000 (Revised) for assurance engagements other than audits or reviews of historical financial information, including sustainability information, will see differences between ISAE 3000 and ISSA 5000, but also much that is familiar. “You will be dealing with different subject matter and subject matter information, but we haven’t changed the foundation of an assurance engagement. That’s sound and that’s known – and globally,” said Josephine Jackson, IAASB Vice-Chair.

Winrow echoes this, based on his involvement in building an ISSA 5000 methodology for Forvis Mazars. “In our profession we are used to standards for assurance, ethics and independence, and quality assurance. In that respect, there is a lot that is familiar,” he said. “I would characterise the challenge as a knowledge gap rather than a skills gap – auditors have the skills that are needed to provide sustainability assurance, but maybe not the specialist knowledge on all sustainability-related topics,” added Winrow, noting that even seasoned audit and assurance professionals may face a steep learning curve.

Nonetheless, for many auditors and other professional accountants with an interest in sustainability assurance there will be plenty of time to consider and prepare for potential challenges – and opportunities. In jurisdictions that adopt them, both ISSA 5000 and the IESSA are effective for assurance engagements on sustainability information prepared for voluntary or mandatory disclosure for periods beginning on or after 15 December 2026, although early adoption is permitted and encouraged. 

Along the way, some of the talking points that emerged during a panel discussion at our event offer insights for firms that are considering, preparing for, or implementing the new sustainability assurance standards. 

Key takeaways for assurance practitioners

• Be prepared for complexity
• Begin your analysis/readiness review as soon as possible
• Use all available resources
• Engage with external experts
• Start training and building staff knowledge (including for specialist areas/topics/subject matters)
• Develop internal expertise and capacity
• Consider your methodology
• Don’t let perfect be the enemy of good

Not everything about the new framework for sustainability assurance will feel familiar or comfortable for experienced audit and assurance practitioners. Areas of sustainability assurance where some may encounter challenges and hurdles include:

• materiality (multiple types of materiality and information, quantitative and qualitative measures, application by the entity and practitioner, how to accumulate misstatements);
• risk assessment (across information with different characteristics, different potentials for bias and misinterpretation);
• estimates and forward-looking information;
• working with value chains; and 
• variations in scope and depth of limited assurance engagements.

Going forward

Demand for a global framework that establishes baseline requirements for sustainability assurance engagements has accelerated related standard-setting activity over recent years and the IESSA and ISSA 5000 have both been developed at a pace. Nonetheless, extensive outreach by both boards has helped to ensure that publication of the IESSA and ISSA 5000 has been accompanied by IAASB and IESBA resources to support consistent adoption and implementation (see below), with plans for more guidance in the future, as it becomes apparent where this is needed.

“Global sustainability assurance standard setting is expected to move forward at a more sedate pace, as the IAASB and IESBA focus on developing concise, focused and pragmatic guidance and support for providers and users of sustainability assurance, as the ecosystem learns from implementation and emerging practice,” said Jackson. Meanwhile, ICAEW will continue to monitor developments around sustainability assurance and provide resources to help individuals and firms develop the expertise and capacity to prepare for and manage the coming opportunities and challenges.