Following the increased reporting on sustainability in recent years, the growing demand of stakeholders for quality non-financial reporting and recognising the critical role of assurance in sustainability reporting, the International Auditing and Assurance Standards Board (IAASB) commenced work on the International Standard on Sustainability Assurance (ISSA) 5000, which is expected to be issued later this year with an effective date one to two years after issue.
The need for this new standalone standard on sustainability reporting assurance was to ensure a consistent approach to sustainability reporting assurance.
The imporance of assurance in sustainability reporting cannot be over-emphasised, with benefits ranging from ensuring compliance with regulations, improved stakeholder confidence in the information reported, increased reliance and quality on the data applied to avoid greenwashing, enhanced credibility and trust and improved management systems and reporting to ensure that management sets realistic targets and commitments. It is, therefore, no surprise that the IAASB has progressed this project to make this standard available later this year.
ISSA 5000 will be the global baseline for sustainability assurance and apply to all reporting frameworks. For instance, the new standard can be used to provide assurance on reporting frameworks such as IFRS S1 and IFRS S2 sustainability disclosure standards issued by the International Sustainability Standards Board and the Global Reporting Initiative framework, among others.
The ISSA 5000 would also apply to all sustainability topics that organisations may choose to assure in their reports, for instance, social, economic or governance topics, to name a few. The new standard has also been developed for use by all assurance practitioners, which means both professional and non-professional accountant assurance practitioners can apply it provided they comply with its ethical and quality management requirements.
The standard also provides guidance for performing limited and reasonable assurance engagements. As stakeholders pay more attention to sustainability reporting, organisations must provide assurance on the information in these reports to increase stakeholder confidence and trust.
Akinyemi Awodumila is a Partner at Deloitte East Africa. He is an author who writes and speaks widely on corporate reporting topics.
