On November 12, 2024, Accountancy Europe and the International Federation of Accountants (IFAC) co-hosted a webinar called "Shaping the Future of Sustainability Assurance Engagements," drawing over 700 participants from 116 jurisdictions to explore the vital role of professional standards in sustainability assurance.

You can watch the full event here:

About one year after their in-person conference, Preparing for High-Quality Sustainability Assurance Engagements, Accountancy Europe and IFAC joined forces once again to drive forward the conversation on sustainability assurance. This reunion took place on the day that the International Auditing and Assurance Standards Board (IAASB) published its final International Standard on Sustainability Assurance (ISSA) 5000, "General Requirements for [AB1] [CB2] Sustainability Assurance Engagements" and its basis for conclusion, following approval by Public Interest Oversight Board (PIOB). This standard also received support from International Organization of Securities Commissions and IFAC.

Hilde Blomme in a webinar meeting
Tom Seidenstein in a webinar meeting

 

Following introductory remarks by Hilde Blomme, Deputy CEO of Accountancy Europe, distinguished speakers from the International Auditing and Assurance Standards Board (IAASB), the Committee of European Auditing Oversight Bodies (CEAOB), and the Nordic Federation of Public Accountants took the stage.

Tom Seidenstein (IAASB Chair), Willie Botha (IAASB Program and Technical Director), presented the ISSA 5000, approved in September 2024; Marjolein Doblado (CEAOB’s International Auditing Standards Subgroup Chair) presented the CEAOB’s non-binding guidelines on limited assurance for sustainability reporting published on 30 September 2024; and Helene Agélii (Secretary General, Nordic Federation of Public Accountants) shared insights on national standard setting activities around CSRD assurance in Nordic countries. David Madon, Director of Sustainability, Policy, and Regulatory Affairs at IFAC, offered concluding remarks.

Sustainability assurance is key to building trust

Speakers made it clear that the system for sustainability information should be built on a foundation of high-quality reporting standards, complemented by robust assurance standards, supported by ethical and independence requirements, and overseen by empowered regulatory authorities.

“In my mind, the public interest also requires those frameworks to enable global comparability, encourage the development of a cadre of professionals capable of producing and assuring high quality reports, and maybe most importantly, be unapologetic in its commitment to quality and ethics,” said Tom Seidenstein.

The discussions underscored the pivotal role of assurance in building trust in sustainability disclosures, highlighting that sustainability reporting could only evolve towards reaching a level of credibility similar to financial reporting if assurance would become mandatory, like in the European Union. This shift also requires a change of mindset, with professionals viewing sustainability disclosures not as a compliance task, but as essential to corporate measurement, governance, and accountability.

Key features of ISSA 5000 and the CEAOB Guidelines

Marjolein Doblado in a webinar conference

To meet these needs, ISSA 5000 has been designed as the global standard for sustainability assurance, supporting harmonized, interoperable reporting frameworks such as the ISSB standards and the European Sustainability Reporting Standards (ESRS). It will apply to assurance engagements irrespective of the criteria or framework that an entity applies in preparing its sustainability information. ISSA 5000 is underpinned by ethics and quality management, and addresses both limited and reasonable assurance engagements. “What was also very important for us from the start is that this standard is available for use by all assurance practitioners, therefore both professional accountant and non-accountant assurance practitioners,” Willie Botha highlighted.

Willie Botha in a webinar conference

Developments in Europe have been taken into account while developing ISSA 5000. “We've also included the conditional requirement regarding double materiality so that we can accommodate those frameworks such as in Europe, where the framework requires the entity to apply both financial materiality and impact materiality in preparing the sustainability information. And if that is the case, the practitioner from the assurance engagement side is also required to take both perspectives into account in determining and considering materiality for purposes of planning and performing the engagement and evaluating the materiality of misstatements,” Willie Botha explained.

“ISSA 5000 is expected to be the global baseline for the limited sustainability assurance standard in the EU, topped-up with EU specifics to meet the requirements in the CSRD,” said Hilde Blomme. In the European context, the Corporate Sustainability Reporting Directive requirements for reporting and assurance have started this year in the EU. The CEAOB has therefore been invited by the European Commission to develop non-binding guidelines regarding limited assurance on sustainability reporting, with the aim to avoid fragmentation and to ensure that practices are as consistent as possible until the adoption of an assurance standard at the EU level.

“The objectives of the Guidelines are to facilitate a common understanding of some of the key aspects of the limited assurance engagement requirements that are introduced by the CSRD. They do not override, nor replace, pronouncements that may be enforced at national level in EU Member States. They are not a standard per se and they should be read in conjunction with any national or other rules applicable,” Marjolein Doblado explained.

Helene Agélii echoed this, adding: “This guidance, which the CEAOB has developed while ISSA 5000 was being developed, taking into consideration other steps being taken at the country-specific level within the EU, will further the understanding and application of IAASB-based sustainability assurance, so that practice over the next two years in the EU can best support an EU-wide assurance standard decision in 2026.”  

A clear call for collaboration for the way forward

Helene Agélii in a webinar conference
David Madon in a webinar conference

Speakers confirmed that high-quality assurance is essential to achieve a truly connected, global reporting ecosystem. Discussion also highlighted the dual challenge and opportunity of developing the necessary skills and capacity for delivering high-quality sustainability information.

David Madon, in his concluding remarks, stressed that “building an interconnected framework for reporting and assurance will require patience and collaboration as all stakeholders—businesses professional accountants and auditors, and regulators—prepare for the evolving demands of sustainability information as a critical component of corporate reporting.”

“Collaboration is key to avoid fragmentation and enhance comparability and consistency,” he noted. 

IAASB and CEAOB have been in regular dialogue while developing the standard and guidance to date, and the IAASB will issue more application guidance from January onwards.

Cecile Bonino
Cecile Bonino

Principal, Global Engagement

Cecile Bonino is Principal of Global Engagement for IFAC. She bridges global organizations' relationship management, policy support, event management, and brand awareness. A lawyer by education, Cecile has 20 years of experience in public affairs and public relations. Before joining IFAC, Cecile worked for 13 years at ACCA, where she headed EU Affairs and the ACCA Brussels office, working with European decision and policymakers, Media and key influencers, as well as global organizations. Prior to this, Cécile worked as a consultant in financial services, energy, environment, and climate change at Weber Shandwick and as Environment and Legal Affairs adviser at the European Landowners Organisation. At the beginning of her career, Cécile also worked at the DG TRADE of the European Commission, the DG Development of the College of Europe, and the law firm, Gide Loyrette Nouel. In 2012, Cécile won the ‘Public Affairs Professional of the Year’ prize at the European Public Affairs Awards.

David Madon

Director, Sustainability, Policy & Regulatory Affairs

Mr. Madon joined IFAC in 2019, where he is Director - Sustainability, Policy & Regulatory Affairs.  He is responsible for developing and coordinating IFAC’s sustainability policy and advocacy activities in addition to conducting research, policy development, and engagement with respect to a range of topics and stakeholders, including industry organizations, regulators, public authorities, and institutional investors.  Mr. Madon's areas of expertise include sustainability/ESG, corporate reporting, financial audit quality/reform, sustainability assurance, ethics, investor protection, financial market regulation, and credit markets.  Most recently, he has focused on the development of a global reporting system (including assurance) for sustainability/ESG information.  Prior to IFAC, Mr. Madon represented the IFRS Foundation in the U.S. for nearly a decade, during which he focused on building institutional investor relationships, funding-raising, and the adoption of IFRS Standards by U.S. publicly traded companies. Prior to his public policy work, Mr. Madon spent twenty-five years in financial services, most recently as a Managing Director at Dresdner Kleinwort Wasserstein. He holds a Masters in Public Administration-MC from the Harvard Kennedy School, an MBA in Finance from The University of Chicago Booth School of Business, and a BS in Management-Accounting from Purdue University Northwest.

 
 
Hilde Blomme

Deputy CEO, Accountancy Europe

Hilde Blomme joined Accountancy Europe in 2003 and has been Deputy CEO since 2011. Hilde provides regulatory and technical expertise and contributes to developing the Accountancy Europe strategy. She is deeply knowledgeable on reporting and assurance practices in the areas of financial and non-financial information (NFI), sustainability and, ESG. Hilde spent nine years as an external auditor for both multinational and small and medium-sized enterprises (SMEs) clients with PricewaterhouseCoopers in London, New York and Brussels. She started her professional career in the financial sector and with small practices serving SMEs clients. Hilde is qualified as a US Certified Public Accountant, Belgian Chartered Accountant and member of the Association of Chartered Certified Accountants (ACCA). She holds an MBA in International Business Management, a Master’s degree in Applied Sciences and a Master’s degree in Company Law from the Katholieke Universiteit Leuven/Brussel, Belgium. She speaks Dutch, English and French.

Harun Saki
Harun Saki

Senior Manager

Harun Saki is a Senior Manager at Accountancy Europe and the Head of Assurance. He engages in various projects related to auditing & assurance and specialises in international standards on auditing and professional ethics. Before his role at Accountancy Europe, he worked as a public sector auditor at the Turkish Court of Accounts (2008-2014) and then as a financial auditor at the International Board of Auditors for NATO (2014-2019). He is a Certified Management Accountant (CMA) and Certified Information Systems Auditor (CISA). Harun has a master’s degree in Banking and Finance and is married with two daughters.