The IAASB has recently introduced the ISSA 5000, establishing a robust framework for practitioners engaging in sustainability assurance.
This development aligns with the increasing global emphasis on sustainability and climate-related reporting, underscored by recent regulations such as the EU’s Corporate Sustainability Reporting Directive (CSRD) and the IFRS climate and sustainability standards issued by the International Sustainability Standards Board (ISSB).
IAASB Chair Tom Seidenstein highlighted that while ISSA 5000 meets European requirements, its design aims to provide a global baseline suitable for all jurisdictions. He pointed out the standard’s versatility in supporting both limited and reasonable assurance engagements, and its compatibility with traditional and double materiality concepts. Double materiality considers both the impacts of sustainability issues on an enterprise and the enterprise’s impacts on the environment and society, a principle embedded in multiple sustainability frameworks.
The launch of ISSA 5000 comes in response to calls for more credible and accurate sustainability reporting. According to surveys conducted by KPMG and EY, the majority of corporate executives and finance professionals agree that independent third-party assurance boosts confidence in the credibility of sustainability disclosures. Additionally, the European Commission has tasked the Committee of European Auditing Oversight Bodies (CEAOB) with advising on integrating ISSA 5000 into CSRD-related activities.
Support for the new standard also comes from IOSCO, with Chair Jean-Paul Servais advocating for a comprehensive international regulatory framework for sustainability-related disclosures. Servais praised the IAASB’s timely introduction of the standards, which are set to enhance the assurance of corporate disclosures starting in 2024.
The initiative represents a significant step in standardizing sustainability assurance practices globally, ensuring that companies across different regions adhere to high-quality reporting standards that meet investor and regulatory expectations.
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