As sustainability reporting continues to evolve, many organisations are beginning to explore independent assurance over their sustainability information. Whether driven by regulation, investor expectations or internal governance, sustainability assurance is becoming an increasingly important part of the reporting landscape.
Alongside this growing interest comes another important development: the introduction of International Standard on Sustainability Assurance (ISSA) 5000.
Since its publication, one question has been asked time and time again by organisations and assurance practitioners alike:
Can ISAE 3410 and ISAE 3000 (Revised) still be used for sustainability assurance once ISSA 5000 becomes effective?
The International Auditing and Assurance Standards Board (IAASB) published a Frequently Asked Questions document to clarify exactly this point. In this article, we summarise what it means in practice and what organisations should be thinking about as they prepare for the transition.
Understanding which assurance standard applies is important because it can affect engagement planning, assurance reports and the way organisations prepare for future sustainability assurance engagements.
First, what are these standards?
If you’re new to sustainability assurance, the different standards can appear confusing. Each has a different purpose.
ISAE 3000 (Revised) is the IAASB’s overarching standard for assurance engagements other than audits or reviews of historical financial information. Before ISSA 5000, it provided the foundation for many sustainability assurance engagements.
ISAE 3410 is a subject-specific standard designed for assurance engagements over greenhouse gas statements. Organisations obtaining independent assurance over Scope 1, Scope 2 and Scope 3 emissions have commonly seen this standard referenced within their assurance reports.
ISSA 5000 is the IAASB’s new global standard for sustainability assurance engagements. Rather than focusing on a single sustainability topic, it has been developed to support assurance over sustainability information more broadly.
Understanding the role of each standard makes it easier to understand why the introduction of ISSA 5000 changes the international assurance landscape.
So, can ISAE 3410 and ISAE 3000 still be used?
In most cases, no.
The IAASB’s FAQ explains that once ISSA 5000 becomes effective:
- ISAE 3410 will be withdrawn for international sustainability assurance engagements.
- ISAE 3000 (Revised) will no longer apply internationally to sustainability assurance engagements.
- ISSA 5000 becomes the applicable IAASB standard for sustainability assurance engagements.
This is an important clarification because many organisations were aware of the withdrawal of ISAE 3410 but were less aware that the position also affects ISAE 3000 (Revised).
Is there an exception?
Yes. One of the most helpful parts of the IAASB’s guidance is its explanation of jurisdictional adoption.
International standards are not adopted everywhere at exactly the same time. Some countries adopt IAASB standards directly, while others introduce their own jurisdictional equivalents through local legislation or regulation.
As a result, there may be circumstances where a jurisdiction continues to require or permit a local equivalent of ISAE 3000 (Revised) or ISAE 3410 until ISSA 5000 has been formally adopted.
The important point is that organisations should not assume the transition will occur in exactly the same way in every jurisdiction.
What does this mean for organisations?
For most organisations, the introduction of ISSA 5000 goes beyond replacing one assurance standard with another.
“One of the biggest misconceptions we’ve seen is that the transition to ISSA 5000 is only about replacing one assurance standard with another. In practice, organisations should also understand how the change affects engagement planning, reporting and the standards that can be applied to sustainability assurance.”
José Hopkins ACA – Chartered Accountant & Sustainability Consultant at Acclaro Advisory
If you’re planning a sustainability assurance engagement over the coming reporting cycles, it is worth discussing a few practical questions with your assurance provider.
- Which assurance standard will apply to our next engagement?
- Has ISSA 5000 been adopted within our jurisdiction?
- Will our engagement letter or assurance report need updating?
- Are we preparing for the requirements of the appropriate assurance standard?
Having these conversations early can help avoid uncertainty as organisations transition to the next generation of sustainability assurance.
Looking ahead
The introduction of ISSA 5000 represents an important milestone in the development of sustainability assurance.
While much of the discussion has focused on the withdrawal of ISAE 3410, the IAASB’s FAQ makes clear that organisations should also understand the future applicability of ISAE 3000 (Revised) and the role that jurisdictional adoption plays in determining which standard applies.
We will be publishing a series of articles exploring sustainability assurance and ISSA 5000 in more detail, including what the new standard means in practice, how organisations can prepare for assurance engagements and the steps that can help strengthen assurance readiness.
How Acclaro can help
Whether you’re preparing for your first sustainability assurance engagement or planning the transition to ISSA 5000, we can support you at every stage of the assurance journey.
- Pre-assurance readiness: Identify gaps in your reporting processes, evidence, governance and internal controls before assurance begins.
- Independent limited assurance: Deliver independent limited assurance over greenhouse gas emissions and other sustainability information in accordance with the applicable assurance standards.
- Post-assurance improvement: Provide practical recommendations to strengthen reporting processes, improve data quality and enhance assurance readiness for future reporting cycles.
If you’d like to discuss how ISSA 5000 could affect your organisation or your next assurance engagement, we’d be pleased to help.
