How will assurance reporting work under CSRD?

Mandatory assurance

Under the CSRD, companies within its scope are required to obtain external assurance on their sustainability reporting. This marks a shift from the previous voluntary approach, making assurance a mandatory component of sustainability disclosure.

Phased implementation

The CSRD adopts a gradual approach to assurance implementation:

• Limited assurance: Initially, companies must obtain limited assurance on their sustainability reporting. This level of assurance involves fewer procedures compared to reasonable assurance and typically results in a negative form of expression (e.g., "nothing has come to our attention that causes us to believe...").
• Reasonable assurance: The European Commission will assess the feasibility of transitioning to reasonable assurance by October 1, 2028. Reasonable assurance involves more extensive procedures, including consideration of internal controls and substantive testing, resulting in a positive form of expression (e.g., "in our opinion...").

Scope of assurance

CSRD assurance will need to cover several key aspects:

1. The process used to identify what information is to be reported 
2. Compliance with the European Sustainability Reporting Standards (ESRS)
3. Compliance with electronic tagging requirements
4. Compliance with EU Taxonomy Regulation reporting requirements

Assurance standards

The European Commission will adopt assurance standards to guide the process:

• Limited assurance standards by October 1, 2026
• Reasonable assurance standards by October 1, 2028 (if deemed feasible)

Until these standards are adopted, assurance providers should base their work on national assurance standards for sustainability reporting.

Assurance providers

Under the CSRD, the statutory auditor of the company may provide the sustainability assurance. However, member states have the option to allow independent assurance service providers to perform this task.

Assurance report

The assurance provider will present an assurance report containing:

• A conclusion about the company's compliance with reporting requirements
• The scope of the assurance engagement
• The assurance standards applied
• The work performed
• ESRS alignment - This will include ESRS alignment with sustainability reporting and that the process carried out by the undertaking to identify the information reported is carried out in line with the mandated Double Materiality Assessment (DMA) process.

This report will be published alongside the company's management report.

Preparing for CSRD assurance reporting

Companies should take proactive steps to prepare for CSRD assurance:

• Strengthen internal controls: Develop robust systems and processes for collecting and reporting sustainability data.
• Conduct readiness assessments: Perform gap analyses to identify areas needing improvement before formal assurance begins.
• Engage early: Start discussions with potential assurance providers to understand expectations and requirements.
• Invest in training: Ensure relevant staff are knowledgeable about CSRD requirements and assurance processes.
• Document thoroughly: Maintain clear documentation of sustainability reporting processes and decisions to support the assurance engagement.

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