Exploring the impact of new sustainability assurance standards on engagements

The International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standard Board for Accountants (IESBA) officially launched new global standards for sustainability assurance engagements in January 2025. These included:

• the IAASB’s International Standard on Sustainability Assurance, ISSA 5000, General Requirements for Sustainability Assurance Engagements, and Conforming and Consequential Amendments to Other IAASB Standards Arising from ISSA 5000; and
• IESBA’s International Ethics Standards for Sustainability Assurance (including International Independence Standards) (the IESSA), and revisions to the IESBA Code to add material on Using the Work of an External Expert.

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.

As the IAASB and IESBA have built on existing models, practices and standards, much about ISSA 5000 and the IESSA will seem familiar to those who have conducted assurance engagements using other global standards. This was also noted by practitioners in an earlier Audit & Beyond article on engaging with sustainability assurance. However, the arrival of ISSA 5000 and the IESSA will still prompt questions from assurance practitioners, such as which International Standards on Assurance Engagements (ISAEs) are impacted by ISSA 5000, or how the IESSA fits into the existing standards framework for assurance, ethics and independence.

What does ISSA 5000 encompass?

ISSA 5000 is an overarching standard that provides a principles-based framework for each phase of a sustainability assurance engagement: from acceptance and continuance to reporting.

ISSA 5000 can be:

• applied to all assurance engagements on sustainability information. This includes topics such as culture and the environment, including emissions such as greenhouse gases (GHG) and aspects of topics such as governance, key performance indicators, metrics, risks and opportunities;
• used for assurance engagements on sustainability information prepared using suitable applicable criteria, which may be in the form of a range of established framework criteria, or entity-developed criteria, or both. Examples of suitable framework criteria include standards from the Global Reporting Initiative, the International Sustainability Standards Board and the European Sustainability Reporting Standards;
• applied to entities of any type, size and complexity. It can be used for single entity and group sustainability assurance engagements, and it includes value chain entities within the reporting boundary; and
• used for both limited assurance and reasonable assurance engagements. It clearly distinguishes between their different requirements and separate extracts are available showing only the ISSA 5000 content relating to limited and reasonable assurance.

ISSA 5000 is available for use by professional accountant and non-professional accountant assurance practitioners. Because it is underpinned by ethics and quality management requirements, all practitioners must comply with the IESBA Code and be a member of a firm that applies the International Standard on Quality Management, ISQM 1, or follows professional ethical and quality management requirements, or requirements in law or regulation that are at least as demanding as ISQM 1.

To facilitate understanding and consistent adoption and implementation of ISSA 5000, the IAASB provides a growing range of support and implementation materials. These include the Basis for Conclusions, factsheets, frequently asked questions (FAQs), videos, illustrative assurance reports and technical webinars, with additions emerging in response to feedback and learnings from implementation and emerging practice.

ISSA 5000 is part of a coordinated and aligned package of sustainability assurance requirements that aim to advance trust and transparency in high-quality, consistent sustainability information and its assurance. ISSA 5000 has been designed to work in tandem with the IESBA’s revised International Code of Ethics for Professional Accountants, which now encompasses the IESSA.

What about ISAEs?

As ISSA 5000 can be applied to all assurance engagements that relate to sustainability matters when it becomes effective from 15 December 2026, the IAASB is withdrawing ISAE 3410 for assurance of an entity’s greenhouse gas (GHG) statement. The exception is where a law or regulation requires the use of a jurisdiction-specific version of ISAE 3410.

ISAE 3000 (Revised) Assurance Engagements Other than Audits or Reviews of Historical Financial Information has been widely used as a ‘general purpose’ standard for reporting on a range of subject matters including sustainability information. However, when ISSA 5000 becomes effective, with its more specific requirements and guidance for sustainability matters, ISAE 3000 will no longer be able to be used on sustainability assurance engagements, unless that jurisdiction hasn’t yet adopted ISSA 5000.

The following table highlights some key differences between ISSA 5000 and ISAE 3000 (Revised).

What is the IESSA?

The IESSA sets out new international standards for ethics and independence in sustainability reporting and assurance, which have been included as a new Part 5 of the revised IESBA Code.

The IESSA is intended to be equivalent to the standards of ethical behaviour and independence that apply to audits of financial statements.

The ethical requirements of the IESSA build on the established IESBA Code and its five fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. The IESSA takes a threats and safeguards approach, and per paragraph 100.4 of the IESSA, “includes a conceptual framework, setting out the approach to be taken to identify, evaluate and address threats to compliance with those fundamental principles and threats to independence”.

The IESSA comprises:

• ethical requirements – applying to all sustainability assurance engagements and any other professional services the sustainability assurance practitioner provides to the same client; and
• independence requirements – applying to sustainability assurance engagements where a conclusion is expressed on sustainability information that, according to IESSA paragraph 5400.3b, is reported in accordance with a general-purpose framework, is required by local law or regulation, or is publicly disclosed to support decision-making by investors or other users.

While developing the IESSA, the IESBA also revised its Code of Ethics to address Using the work of an external expert. According to IESBA, the revised Code (including the IESSA) now provides an ethical framework to guide professional accountants and other sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity for that expert’s work to be used for the intended purposes.

The IESSA also includes a section on using the work of another assurance expert in the performance of sustainability assurance engagements, including requirements and application of the conceptual framework to identify, evaluate and address threats to compliance with the fundamental principles.

Resources to support implementation of the new IESSA (and related revisions to the IESBA Code) are available. They include Basis for Conclusions documents, factsheets and technical overviews, implementation guides, webinars and more.

Which jurisdictions are adopting ISSA 5000 and the IESSAs?

Information on jurisdictional decision-making and commitments to these new standards is emerging over time. The IAASB is tracking jurisdictional adoption and providing periodic updates on the hub with its other resources. According to its update in July 2025, Australia and Mexico have adopted ISSA 5000 for both mandatory and voluntary sustainability assurance engagements, and Hong Kong for voluntary assurance engagements. Some European countries are listed in the ‘under consideration’ category. The latter is also subject to outcomes relating to a European Commission ‘Omnibus’ package of proposals that aims to simplify European Union rules on sustainability.

What’s happening in the UK?

In the United Kingdom (UK), the Financial Reporting Council (FRC) has recently consulted on proposals to adopt an ISSA 5000-aligned ISSA (UK) 5000 that assurance providers can use on a voluntary basis. The FRC aims for ISSA (UK) 5000 to support consistent, quality sustainability assurance engagements across the UK market and contribute to greater international alignment of sustainability assurance engagements.

The FRC also proposes that the provisions of the IESBA Code related to sustainability assurance engagements should be the relevant ethical requirements for ISSA (UK) 5000, noting that they represent a robust set of requirements that are appropriate for sustainability assurance in the UK and globally. To learn more about these plans, explore the FRC’s ISSA (UK) 5000 consultation and proposed standard and ICAEW’s consultation response.

During 2025 the FRC also published findings from its Assurance of Sustainability Reporting Market Study, which provides insights into the UK market. The FRC recommended three key actions to support the market’s development:

• Establish a clear UK policy framework for sustainability assurance that provides medium-term certainty for providers and reporters, supports investment, and aligns with international frameworks where appropriate.
• Create a unified regulatory regime that consolidates standard setting, oversight, enforcement, and market monitoring to maximise certainty for companies, providers, and investors.
• Improve the calibre of available information on the quality of sustainability assurance to support how the assurance market functions.

The UK government has also been consulting on its plans for developing an oversight regime for assurance of sustainability-related financial disclosures. This is one of three pivotal sustainability-related consultations, including on proposed UK Sustainability Reporting Standards and transition plan requirements. For an overview of ICAEW’s responses to the consultations, read this recent Insights article on the direction of travel for UK sustainability-related disclosures.

Keeping pace with change

Developments related to global and local frameworks for sustainability reporting, assurance, ethics and independence will continue over the coming years. With so much potential change on the horizon, assurance practitioners are advised to regularly check for updates on the following ICAEW and standard-setters’ resource hubs.