Assurance on Sustainability / Environmental, Social and Governance (ESG) Reporting
What the Project Aims to Achieve
Globally, there is increasing demand for organizations to provide information on sustainability / ESG matters. The reliability of such reporting is a key issue for many stakeholders, in particular investors, regulators, and non-governmental organizations.
As a result, stakeholders are looking to the IAASB to take proactive steps in providing robust standards that support and address sustainability / ESG reporting from an audit and assurance perspective. The IAASB’s Work Plan for 2022-2023 signals the IAASB’s readiness to take action on this topic.
In delivering on this action, the IAASB is currently undertaking information gathering and research activities to:
- Understand the topics (underlying subject matter), aspects about the topics (aspects of the underlying subject matter), mechanism for reporting (the subject matter information), and reporting standards (criteria) underlying sustainability / ESG reporting.
- Understand the challenges in performing assurance engagements on sustainability / ESG reporting, and the urgency and priority of these challenges.
- Identify and prioritize possible actions the IAASB should take in addressing assurance on sustainability / ESG reporting.
The IAASB’s work will build upon IAASB Standards and guidance that already deal with this topic more broadly, including:
- ISAE 3000 (Revised), Assurance Engagements Other Than Audits or Reviews of Historical Financial Information;
- ISAE 3410, Assurance Engagements on Greenhouse Gas Statements;
- The package of non-authoritative guidance on sustainability and other extended external reporting assurance engagements (see the EER Project Page)
- The Staff Audit Practice Alert, The Consideration of Climate-Related Risks in an Audit of Financial Statements.
Please also visit the IAASB’s dedicated Focus Area Page for Sustainability Assurance, which brings together all content the IAASB has available regarding assurance on sustainability reporting and other forms of extended external reporting.
Current Status of the Project
In June 2022 the Board supported development of a “stand-alone” standard consistent with ISAE 3000 (Revised) for assurance on sustainability reporting, as the IAASB’s immediate action. The standard(s) will draw on material in the existing IAASB standards and guidance with enhancements and specificity to address both limited and reasonable assurance on sustainability information reported. The initial standards-setting action will focus on addressing priority challenges arising from: limited versus reasonable assurance, the suitability of the reporting criteria, the scope of the engagement, evidence, internal controls, practitioners’ materiality and reporting.
In September the Board will consider an outline of the project plan, a draft structure of the standard, requirements to be brought in from ISAE 3000 (Revised) and ISAE 3410 and, time permitting, material from the EER Guidance to be incorporated as requirements in the standard. The IAASB’s key stakeholder outreach will be on-going.
Working Group Information
IAASB Staff Contacts
- Natalie Klonaridis
- Claire Grayston
- Adriana Chircusi
Working Group Members
- Lyn Provost (Chair)
- Wolfgang Böhm
- Diane Larsen
- Warren Maroun
- Isabelle Tracq-Sengeissen