Momentum is gathering for increased sustainability/environmental, social, and governance (ESG) reporting requirements for companies. Investors, policymakers, and a broad range of stakeholders seek higher quality, increasingly standardized reporting on companies’ performance on non-financial measure. And with this, demand for assurance engagements that enhance the degree of confidence of the intended users of sustainability/ESG reporting is growing.

We at the International Auditing and Assurance Standards Board (IAASB), the independent audit and assurance standard setter serving more than 130 countries, expect the drive for added corporate reporting and disclosure on sustainability and climate-related information only to accelerate. We see the trend moving from voluntary reporting commitments to requirements mandated by jurisdictions throughout the world. The European Union’s proposed Corporate Sustainability Reporting Directive is an important example in that direction. The establishment of the International Sustainability Standards Board (ISSB) by our counterpart organization, the IFRS Foundation, enhances the likelihood of a trusted and independent source developing globally accepted reporting standards as the basis of requirements.

As with financial reporting, the IAASB believes that market participants are best served when financial and other reported information benefits from external assurance, provided by professionals committed to the public interest and highest ethical standards. For this reason, in the past the IAASB has devoted significant energy to creating standards to govern assurance of non-financial information. We have a well-established umbrella standard, International Standard on Assurance Engagements (ISAE) 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information, and subject-matter specific standards such as, ISAE 3410, Assurance Engagements on Greenhouse Gas Statements. In April of this year, we published guidance aimed at helping assurance professionals apply our umbrella standard to sustainability and other non-financial (or extended external reporting) assurance engagements.

We know that our work is only the beginning, a solid foundation to build upon. This is why we committed to do more work to enhance the assurance of sustainability/ESG reporting when we approved our new 2022-2023 work plan last week.

The IAASB agreed to dedicate capacity and resources to the assurance of sustainability/ESG reporting. Information gathering and research activities, using dedicated staff resources, to determine future IAASB action will commence in January 2022. This initial work will also determine the precise scope and timing of the IAASB’s efforts. The initial work will also include a willingness to collaborate with key stakeholders throughout the world, including the standard-setting and regulatory communities.

We recognize that our initial consultations could lead to:

  • Developing new subject-matter specific standard(s) that build on and supplement ISAE 3000 (Revised);
  • Targeted enhancements to ISAE 3000 (Revised), as necessary; or
  • Other related actions that are necessary in the public interest. For example, revising our existing guidance or developing new guidance.

Our March 2022 IAASB meeting will the first opportunity to provide feedback, share views and discuss next steps (you can listen to our discussions via YouTube).

We are conscious that demand for enhanced requirements and guidance is high; it is why we are positioning the IAASB to act in a coordinated and responsive manner. 

Tom Seidenstein

Chair*, IAASB and Co-CEO, International Foundation for Ethics and Audit

Tom Seidenstein is the chair of the International Auditing and Assurance Standards Board and the co-CEO of the International Foundation for Ethics and Audit, the recently created organization that houses the IAASB and the International Ethics Standards Board for Accountants (IESBA). Since the beginning of 2023, he has served as co-CEO with IESBA Chair Gabriela Figueiredo Dias.

Mr. Seidenstein was initially appointed chair in July 2019 and reappointed to a three-year term in June 2022. In this role, and now as co-CEO, he has overseen significant revisions of existing audit standards aimed at enhancing public trust, the initiation of a new workstream aimed at creating a global assurance standard for sustainability, and an updated strategy aimed at increasing the responsiveness of standard setting.

Mr. Seidenstein’s career has spanned both the private sector and international standard setting. Prior to joining the IAASB, Mr. Seidenstein held senior strategic leadership positions at the Federal National Mortgage Association, commonly known as Fannie Mae (Senior Vice President, Strategy, Innovation & Capital Management: 2012-19), and the IFRS Foundation (Chief Operating Officer: 2000-2011).

Additionally, Mr. Seidenstein has served at a consulting organization for not-for-profits, CCS Fundraising (Executive Director: 1999-2000), and the Center for Strategic and International Studies (Special Assistant to the Managing Director: 1995-1997). He has also served as a Trustee of the International Valuation Standards Council (IVSC) and on XBRL International’s Board of Advisors.

A strong believer in volunteer service, Mr. Seidenstein has held or holds volunteer leadership positions serving school education the USA and the Make-A-Wish Foundation (both UK and international boards). He holds a Master’s in Public Policy from the Kennedy School of Government at Harvard University and an undergraduate degree (cum laude) from the Princeton School of Public and International Affairs at Princeton University.

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