The IAASB Approves First-Ever Rules for Auditing Corporate Sustainability Disclosures

The IAASB (International Auditing and Assurance Standards Board) has just made a significant move in corporate sustainability reporting by approving the first dedicated standard for sustainability disclosure audits. That’s right, hold your applause until the end.

As sustainability disclosure becomes mandatory in many countries, the new International Standard on Sustainability Assurance (ISSA) 5000 aims to ensure that auditors are approaching their audit engagements consistently and to a high standard of quality. This means that users of audited sustainability reports can then be comfortable that this information is free from material errors or misstatements.

This new standard is a game-changer for businesses striving to meet growing regulatory and stakeholder demands for transparent, verified reporting of their sustainability efforts. Businesses now know what to expect as part of the audit process and can prepare accordingly. At Sumday, we see this as a major milestone for businesses integrating sustainability into their core operations.

So, what exactly does ISSA 5000 cover?

It lays out specific guidelines for auditing the accuracy and reliability of corporate sustainability reports, focusing on ensuring transparency and promoting trust. For companies adopting carbon accounting and sustainability practices, understanding how auditors will approach the assurance process is helpful. It allows for better internal systems and controls, making audits run more smoothly and supporting good risk management and governance.

As more countries move towards mandating sustainability disclosures, having a clear auditing process in place will be essential for businesses to remain competitive and compliant. Sumday is thrilled to see the regulatory landscape moving in a direction that promotes integrity in sustainability reporting, aligning perfectly with our mission of driving meaningful change through reliable carbon accounting.

Straight from the IAASB themselves, the “proposed ISSA 5000 can be applied to:

• Information about all sustainability topics and aspects of topics
• Information prepared in accordance with any sustainability reporting framework, standard or other suitable criteria
• All sustainability information regardless of the mechanism for reporting the information
• Limited and reasonable assurance engagements”.

When does ISSA 5000 come into effect?

The standard is effective for assurance engagements on sustainability information reported: 

(a) For periods beginning on or after December 15, 2026; or
(b) As at a specific date on or after December 15, 2026. 

Early adoption is permitted; it is expected that the Assurance and Auditing Standards Boards in individual jurisdictions will draw from the international standards in finalising their own local standards.

You might be wondering how and why this new standard announcement matters to your business:

• Verified sustainability disclosures increase stakeholder trust

• As regulations tighten, proper auditing processes will keep you compliant

• Proving your sustainability claims can differentiate you in the market

Looking to get ahead with your carbon reporting? Start by meeting the new standards straight off the bat. We’d be happy to chat over a call or get started with a 30 day free trial here.

For even more information about ISSA 5000, click here.