December 2023


  • MEPs vote on draft report on ESG ratings proposal
  • CSDDD trilogue negotiations continue
  • IOSCO provides overview of initiatives to address greenwashing

Feature story

Accountancy Europe responds to IAASB’s proposed sustainability assurance standard

Accountancy Europe has submitted its comment letter on the proposed International Standard on Sustainability Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements.

We believe that achieving consistent, high-quality reporting and assurance require a collaborative effort from all stakeholders. In this context, we congratulate the International Auditing and Assurance Standards Board (IAASB) for the quality and speed of the progress made in this project.

We are of the opinion that ISSA 5000, as a stand-alone, profession-agnostic and principles-based standard, can and should become a global baseline for sustainability assurance engagements.

We encourage the IAASB to continue engaging with European stakeholders and monitor relevant developments on sustainability reporting and assurance, so that ISSA 5000 can serve as a basis for adoption in Europe.

The IAASB should also play its role in the corporate ecosystem’s capacity building given the significance of this ‘new land’ for many stakeholders. This includes working with other parties in the ecosystem to provide support and guidance as appropriate. Accountancy Europe is committed to collaborate with the IAASB in its efforts for responding to public interest issues related to sustainability assurance.

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EU developments

MEPs vote on draft report on ESG ratings proposal

The European Parliament (EP) Economic and Monetary Affairs (ECON) Committee adopted its position on the European Commission’s (EC) proposal to regulate environmental, social and governance (ESG) rating activities. Members of the Parliament (MEPs) propose to:

  • break down the ESG rating to provide more transparency
  • promote the double materiality approach in ESG ratings
  • disclose information to the public on the methodologies, models and key rating assumptions
  • boost competition by choosing at least one ESG rating provider with a market share below 15%

ECON members also approved the mandate to enter the negotiations with the Council.

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CSDDD trilogue negotiations continue

The third trilogue on the Corporate Sustainability Due Diligence Directive (CSDDD) took place on 22 November. Key issues discussed in the third trilogue:

  • provisions on directors’ duty of care to ensure that sustainability matters are embedded into companies’ decisions under Article 25 were deleted
  • ‘supply chain of activities’ seems to be the prevailed definition in relation to scope of obligations
  • sale of products was excluded from supply chain of activities obligations
  • both the EP and Council agreed on disengagement being a last resort measure
  • monetary penalties in case of infringements should be at least 5% of the companies’ net turnover

The next trilogue will take place on 13 December.


EFRAG work delayed

EFRAG postponed the Value Chain Implementation Guidance and Materiality Assessment Implementation Guidance consultations to mid-December 2023. Stakeholders will be able to submit their feedback until the end of January 2024.

EFRAG will open a consultation on the Listed SME standard and the voluntary standard for other SMEs in mid-January 2024, with a 4-month comment period.


ESMA issues explanatory notes on sustainable finance key concepts

European Securities and Markets Authority (ESMA) published three explanatory notes on:


Latest from IPSF work

The International Platform on Sustainable Finance (IPSF) focused its work on three policy areas in 2023:

  • social finance
  • transition finance
  • the comparison of taxonomies

During the United Nations Climate Change Conference (COP28) event, the IPSF presented the reports on social bonds and implementing transition finance principles

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International developments

ISSB announcements at COP28

Multilateral Development Banks confirmed support for the International Sustainability Standards Board (ISSB) work during COP28, which is expected to impact endorsement in the respective regions. Moreover, nearly 400 organisations and 64 jurisdictions committed advancing the adoption or use of the ISSB standards at a global level.

The International Financial Reporting Standards (IFRS) Foundation also launched the IFRS Sustainability knowledge hub to support the use of ISSB standards. The hub:

  • includes more than 100 resources developed by third party organisations
  • was designed to help companies, but can also be used by auditors, investors, regulators and other stakeholders seeking to advance their understanding of ISSB standards

The IFRS Foundation and the International Organization for Standardization (ISO) committed to cooperate towards effective communication about sustainability-related risks and opportunities.


Emmanuel Faber re-appointed as ISSB Chair

Emmanuel Faber was re-appointed as ISSB Chair for a second term, ending on 31 December 2027. He will continue working with vice-chairs Sue Lloyd and Jingdong Hua.

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IOSCO provides overview of initiatives to address greenwashing

The International Organization of Securities Commissions (IOSCO) Board issued a report on supervisory practices to address greenwashing. The report presents some challenges including:

  • data gaps at corporate level
  • transparency, quality, and reliability of ESG ratings and data product providers, including lack of transparency around methodologies
  • lack consistency in labelling and classification of sustainability-related products
  • gaps in skills and expertise
  • evolving regulatory approaches

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IOSCO statement on IAASB sustainability assurance standard

IOSCO issued a statement on IAASB’s proposed sustainability assurance standard (ISSA 5000), identifying five priority topics:

  • definitions, requirements and guidance to support profession-agnostic application without diluting high-quality expectations and requirements
  • continue to differentiate the work effort between limited and reasonable assurance
  • materiality
  • assurance of forward-looking sustainability-related information
  • susceptibility of sustainability information to material misstatement

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IFAC issues sustainability checklist for small businesses

The International Federation of Accountants (IFAC) released a diagnostic tool that can be tailored by each business individual circumstances such as industry sector, lifecycle, products and services provided. The tool aims to help small and medium size businesses to maximise the benefits of incorporating sustainability into their strategy and business operations.

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National developments

UK FCA issues final rules to help consumers navigate sustainable investment products market

The UK Financial Conduct Authority (FCA) published:

  • a policy statement on Sustainability Disclosure Requirements (SDR) and investment labelling regime
  • consultation on the guidance for the anti-greenwashing rule

Their SDR include, among other things, an anti-greenwashing rule for all authorised firms to make sure sustainability-related claims are fair, clear and not misleading.

Other news


This curated content was brought to you by Vita Ramanauskaité, Accountancy Europe Manager, Head of Sustainability, since 2015. You can send her tips by email, follow her on Twitter and connect with her on LinkedIn.