IAASB Launches Global Sustainability Standard to Boost Trust in ESG Reporting

The International Auditing and Assurance Standards Board (IAASB) has taken a major step toward bringing clarity and consistency to sustainability reporting with its new International Standard on Sustainability Assurance 5000 (ISSA 5000). This new standard aims to raise the bar for ESG (environmental, social, and governance) data assurance, giving investors and regulators more confidence that what they see in sustainability reports reflects reality.

"The IAASB has created a global baseline that can work in every jurisdiction, in Europe and elsewhere," IAASB Chair TomSeidenstein said, adding that the new standard aligns with Europe’s Corporate Sustainability Reporting Directive (CSRD) and other major sustainability frameworks, such as those developed by the ISSB and GRI. In short, ISSA 5000 is designed to work globally, regardless of the specific reporting framework a company is using.

Breaking Down ISSA 5000: What’s in the New Standard?

ISSA 5000 was designed to be a “catch-all” for sustainability assurance needs, whether companies are looking for limited or deeper, more rigorous assurance. The standard has some standout features:

• Flexibility Across Frameworks: ISSA 5000 is agnostic about frameworks, meaning it works for sustainability reports prepared under various approaches, from ISSB to GRI.
• For Accountants and Non-Accountants Alike: This isn’t a standard exclusively for CPAs; non-accountant practitioners can also use ISSA 5000 for assurance engagements.
• Addressing Materiality: ISSA 5000 tackles both traditional and double materiality, ensuring reports consider both risks to the company and the broader social and environmental impact.

The standard’s creation followed months of worldwide engagement, with input from stakeholders across six continents through webinars, roundtables, and feedback sessions. This global approach was deliberate to make the standard practical, scalable, and adaptable to various needs and regions.

The launch of ISSA 5000 is more than just a new rulebook; it’s a response to the growing demand from investors, regulators, and the public for trusted, verified ESG information. With backing from the International Organization of Securities Commissions (IOSCO), ISSA 5000 is set to become a key player in ESG assurance, especially as it aligns with Europe’s CSRD.

In fact, the European Commission has asked the Committee of European Auditing Oversight Bodies (CEAOB) to look into adopting ISSA 5000 within the CSRD’s requirements. If this happens, ISSA 5000 could gain fast traction, setting the standard for how companies worldwide approach ESG reporting. It’s also a nod to Europe’s role as a trailblazer in sustainable reporting, with the EU looking to pave the way for global standards.

With ISSA 5000, IAASB is stepping up to meet the demands of a world increasingly focused on sustainability. The standard has the potential to bring greater transparency and consistency to non-financial reporting, which can only strengthen trust between companies and their stakeholders. As more organizations start adopting ISSA 5000, we may see a new era of ESG reporting—one that could make corporate sustainability not just more visible, but more accountable.

In the end, ISSA 5000 is about ensuring sustainability reports are worth more than the paper they’re printed on, holding companies to a standard that investors, regulators, and the public can rely on. As it rolls out, it may well reshape how we look at sustainability data in the years to come.

The GRC Report is your premier destination for the latest in governance, risk, and compliance news. As your reliable source for comprehensive coverage, we ensure you stay informed and ready to navigate the dynamic landscape of GRC. Beyond being a news source, the GRC Report represents a thriving community of professionals who, like you, are dedicated to GRC excellence. Explore our insightful articles and breaking news, and actively participate in the conversation to enhance your GRC journey.