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With the global trend of mandating sustainability reporting and the increasing significance of sustainability reporting in investors’ decision-making processes, more entities are seeking external assurance to improve confidence in their disclosures and build trust with stakeholders.
The International Auditing and Assurance Standards Board (IAASB) made a significant leap in sustainability assurance with the release of the International Standard on Sustainability Assurance (ISSA) 5000 “General Requirements for Sustainability Assurance Engagements” in November 2024. What should we know about ISSA 5000, why is it important and how can we prepare for assurance?
What is ISSA 5000?
ISSA 5000 is a standard designed for assurance on sustainability information. It builds upon the International Standard on Assurance Engagements (ISAE) 3000 “Assurance Engagements Other than Audits or Reviews of Historical Financial Information”, and ISAE 3410 “Assurance Engagements on Greenhouse Gas Statements”. Both frameworks aim to serve as universal standards for sustainability assurance, offering clear guidance to both entities and assurance providers as they navigate the complex sustainability landscape.
How Would ISSA 5000 Affect Sustainability Assurance?
Sustainability reporting is multifaceted—it involves a mix of quantitative and qualitative data on governance, strategy, risks and opportunities management and target-setting across various topics, including environmental, social, and governance. ISSA 5000 aims to enhance the quality of assurance engagements on these sustainability-related disclosures through key features, such as:
- Flexibility: ISSA 5000 applies to all sustainability-related information disclosed regardless of the reporting framework used. This includes widely recognised frameworks such as the Global Reporting Initiative (GRI) and Task Force on Climate-related Financial Disclosures (TCFD), as well as the latest sustainability reporting standard that entities are beginning to adopt—International Sustainability Standards Board (ISSB) S1 and S2; and
- Enhanced professional scepticism: Given the evolving sustainability reporting landscape—shifting from “comply-or-explain” to “mandatory disclosure”—practitioners will need to critically assess an entity’s internal controls, data reporting and documentation processes. This is particularly crucial when verifying narrative disclosures or forward-looking information within sustainability reports. As such, sustainability assurance engagements based on ISSA 5000 will ensure the credibility and reliability of opinions issued on sustainability-related information.
What Should We Expect?
ISSA 5000 will become effective for sustainability information reported for periods beginning on or after 15 December 2026. ISAE 3410 will eventually be superseded, while ISAE 3000 will remain applicable to assurance on non-sustainability-related information. With the ISSB S1 and S2 standards coming into effect and being adopted by more companies for sustainability reporting, the world is moving toward greater uniformity and consistency in sustainability reporting and assurance.
Currently, external assurance engagements in Singapore are generally conducted based on ISAE 3000 and ISAE 3410. With the upcoming phased approach to mandatory external limited assurance on Scope 1 and Scope 2 GHG emissions, Singapore’s regulators are actively encouraging entities to familiarise themselves with the process of external assurance on sustainability reporting.
In line with this global trend, and as a jurisdiction with a rapidly evolving sustainability landscape, Singapore is expected to adopt ISSA 5000 and may potentially develop a local standard equivalent to it in the coming years.
How to Be Assurance-Ready?
In preparation for an external assurance engagement on sustainability information, conducting an assurance readiness assessment will better position entities to meet regulatory requirements. Reviewing existing internal processes for sustainability-related data management and reporting and meeting preconditions for assurance will help entities prepare for continuous assurance.
