3 April 2025 — News
As the European Union (EU) moves to simplify its sustainability legislation, global sustainability reporting and assurance practices are evolving to meet growing demands for transparency, credibility, and impact.
Accountancy Europe and the International Federation of Accountants (IFAC), as representatives of the European and global accountancy profession, reaffirm their commitment to high-quality and consistent sustainability assurance. Achieving this requires a collective effort by all stakeholders, robust professional standards, and regulatory consistency.
Independent external assurance enhances information’s credibility and supports investors and other users in making informed decisions. To fully deliver on this potential, a global baseline for assurance and ethical standards are vital to meet users’ needs and ensure quality, consistency and efficiency of assurance engagements. High-quality sustainability assurance, based on globally accepted standards, is critical to reinforcing trust and ensuring comparability and usefulness of disclosures across markets.
As a stand-alone, profession-agnostic and principles-based standard, the IAASB’s International Standard on Sustainability Assurance (ISSA 5000) could fulfil this role.
IOSCO recognises the potential of the ISSA 5000 and IESBA’s International Ethics Standard for Sustainability Assurance to enhance consistency, comparability and reliability of sustainability information provided to the market.[1] The ISSA 5000 could provide a strong basis for adoption of a future sustainability assurance standard in the EU and beyond.
It is vital that all providers, regardless of their background, operate under an equivalent framework, ensuring a level playing field on professional assurance standards, qualification, ethical requirements including independence, quality framework and public oversight.
“It is absolutely critical for investor and consumer protection that practitioners outside of the audit profession are held by jurisdictional regulators to the same regulatory oversight, disciplinary responsibility and requirements that apply to professional accountants”, said Lee White, CEO of IFAC.
Connectivity between financial and sustainability reporting helps to provide a full picture of the company’s viability and performance. Integrated information allows investors, regulators, and other stakeholders to understand how sustainability risks and opportunities translate into financial outcomes.
The accountancy profession has provided assurance on sustainability information for over two decades, building expertise through professional standards and extensive experience in evaluating systems, processes and controls throughout companies. This is crucial for improving the connectivity between financial and sustainability information. Engaging a single assurance provider for both financial and sustainability reporting enhances consistency, efficiency, and the integration of financial results with ESG performance while reducing administrative complexity.
“When sustainability and financial data align, companies present a clearer, more consistent narrative to the market, enabling stakeholders to make effective and sustainable decisions. Statutory auditors are also well placed to provide assurance on sustainability reporting to support information’s connectivity”, said Eelco van der Enden, CEO of Accountancy Europe.
