Global Standards Set To Strengthen Sustainability Reporting

To respond to the growing demand for reliable sustainability data, the International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants (IESBA) have launched a harmonized set of global standards. The aim of these new measures is to enhance sustainability reporting and assurance practices to create an environment of trust, transparency, and ethical behavior. As global stakeholders rely more and more on accurate information about sustainability to make decisions, these standards represent a significant milestone toward holding corporate actors accountable in their environmental, social, and governance practices.

The newly introduced standards—ISSA 5000 for assurance engagements, IESSA on ethical practices—is an integrated global framework that affects not only the integrity but also the quality of sustainability reporting. These are framework-neutral and vary for different types of sustainability reporting systems, communicating on immature data systems, forward-looking information, as well as unethical practices like greenwashing and fraud. Markets are equipped with interoperable guidelines to promote ethical conduct and accountability across industries.

IAASB Chairman Tom Seidenstein emphasized that the new standards represent a transformative shift, saying, "The interoperable package of ISSA 5000 and IESSA represents an important evolution in global sustainability reporting and assurance. The standards lay essential technical and ethical foundations for qualified practitioners to be able to perform high-quality assurance engagements on sustainability information consistently.

The implementation of these standards is expected to drive transparency and accountability by addressing key ethical risks in sustainability practices. Greenwashing—where companies make exaggerated or false claims about their environmental impact—has been a growing concern among investors and regulators. Fraud and non-compliance with laws and regulations are additional risks that the new standards aim to mitigate. The IAASB and IESBA pave the way to better, more reliable, and trustworthy sustainability reporting through their efforts at creating ethical practice and providing the necessary tools to ensure integrity in the preparers and practitioners.

Gabriela Figueiredo Dias, Chair of the IESBA, emphasized the centrality of ethics in this effort, stating, “Ethics is the foundation of trust. With these standards, we are equipping preparers and practitioners with the tools needed to uphold integrity and foster transparency in sustainability reporting.” By addressing ethical challenges and pressures to act unethically, the standards aim to protect investors and other stakeholders while enhancing confidence in sustainability data.

The IAASB and IESBA are focused on the effective implementation of these standards. The standards will be effective for periods beginning on or after December 15, 2026, although early adoption is encouraged. To ensure a smooth transition, both boards are providing extensive support to stakeholders. This includes global webinars, guidance documents, fact sheets, and technical overviews to facilitate understanding and adoption. In addition, mechanisms for giving feedback will be present to solve the issues that arise from the implementation process.

ISSA 5000 and IESSA also resonate with the global call to sustainability reporting in the global marketplace. In terms of addressing issues of immature data systems, the standards provide a framework that is able to deal effectively with forward-looking information. This is meant to provide better investor protection through the enhancement of trust in sustainability disclosures and proper alignment with best ethical practices. These measures will also be expected to enhance the quality of sustainability reporting but also as means raising the bar for accountability and transparency in the corporate world.

Preparing for and embracing these standards, IAASB and IESBA are doing everything possible to ensure these standards are a success. The standards' needs will be widely discussed in a number of webinars spread across the world, while fact sheets and technical guidance will support various stakeholders to come to grips with the new guidelines. In this context, the IAASB and the IESBA are seeking support for practitioners and organizations in becoming compliant with expectations for sustainability reporting.

This will be a unifying approach by ISSA 5000 and IESSA towards the global landscape of sustainability. Through clear and consistent guidelines on assurance and ethical practices, the IAASB and IESBA address not only the immediate challenges in sustainability reporting but also lay a foundation for long-term accountability and transparency. These standards are expected to increase the reliability of sustainability information when they come into effect, thus allowing stakeholders to make more confident decisions.

This milestone marks a very important step in the global journey toward better sustainability practices. As the IAASB and IESBA continue to emphasize ethics, transparency, and trust, they are setting new benchmarks for corporate accountability, so that sustainability reporting can grow with the demands of stakeholders across the world. With these standards, organizations now have a clear path forward in demonstrating their commitment to ethical and responsible practices that foster a more sustainable future for all.