The IAASB takes Action to Initiate Developing a Sustainability Assurance Standard

In its Work Plan for 2022-2023, the International Auditing and Assurance Standards Board committed to a workstream to address assurance on sustainability reporting. After initiating this project in early 2022, the IAASB has expediated its thinking and decisions regarding matters such as the scope of the IAASB’s work and key challenges that need to be addressed. In a recent article, Tom Seidenstein, IAASB Chair, explains the IAASB’s developments and planned actions for assurance on sustainability reporting.


At the IAASB June 2022 meeting, he says, “the IAASB enthusiastically supported initiating work to develop an assurance standard for sustainability reporting. This immediate action would initially focus on developing an overarching standard that would provide a complete assurance solution covering all areas of the engagement.”

While recognizing the standard is in initial development, and decisions may change as work progresses, the overarching standard would:

·       Standalone from ISAE 3000 (Revised), Assurance Engagements Other Than Audits or Reviews of Historical Financial Information.

·       Address both limited and reasonable assurance. 

·       Be developed using the requirements and principles of ISAE 3000 (Revised), ISAE 3410, Assurance Engagements on Greenhouse Gas Statements, and the IAASB’s non-authoritative guidance on sustainability and other extended external reporting (EER) assurance engagements. In doing so, the requirements and guidance would be enhanced and specified for assurance on sustainability reporting.

·       Focus initially on providing specificity to address certain priority challenges.

·       Be suitable for assurance engagements across all sustainability topics and information about those topics. The standard would also be framework-neutral and neutral regarding the users or stakeholders of the sustainability information.

The IAASB envisages that future standard-setting action could be undertaken to further develop a suite of standards to meet emerging priorities as reporting and assurance mature, and address other challenges not included as part of the initial standard-setting effort.

According to Seidenstein, “with global assets in sustainability and ESG-related investment vehicles due to surpass $53 trillion by 2025, the need for reliable, neutral, and comprehensive frameworks for reporting sustainability information is evident. And policymakers and regulatory bodies have taken note.”

The European Union (EU) continues to negotiate terms for its Corporate Sustainability Reporting Directive. This past March, the U.S. Securities and Exchange Commission proposed new rules regarding disclosure of climate-related risks. The newly formed International Sustainability Standards Board (ISSB), which has support of the G20 and others, issued their exposure drafts for sustainability reporting for public comment.”

As a result, adds Seidenstein, “we face a critical moment: the growing desire globally to develop reliable, high-quality sustainability reporting as a key element of corporate reporting is leading to new requirements and heightened expectations. This will be a journey, and some level of patience is needed. The data capture, information systems, and processes within many organizations needed to report reliably on sustainability are, understandably, in the process of maturing.”

For more, please see the Sustainability Assurance project page.