The International Auditing and Assurance Standards Board (IAASB) has agreed to collaborate with the World Business Council for Sustainable Development (WBCSD) – to strengthen international assurance standards on sustainability reporting.
The collaboration supports WBCSD’s Redefining Value program and its objective to incorporate sustainability reporting within mainstream reporting, while ensuring external reporting follows the applicable IAASB international assurance standards (or their national equivalents). This consistency will champion the road to create greater alignment across reporting frameworks and to build trust and confidence in sustainability reporting.
The WBCSD engaged IAASB as a key collaborator for this new project because it is the global standard-setter for auditing and assurance standards.
Assurance of sustainability information continues to be an issue for preparers and assurance providers. Investors have consistently stated that assurance is important for building confidence in sustainability information in order for the information to be relevant and decision-useful. External assurance provides a critical role in building trust and confidence around sustainability information.
With support and funding from WBCSD, the IAASB approved a major new project to develop voluntary guidance on applying its existing assurance standards to emerging forms of external reporting (EER). EER goes beyond traditional financial reporting to include sustainability (or ESG) information and integrated reporting.
Recent publications by WBCSD and IAASB highlight the need to develop guidance on how EER assurance engagements are performing. This is because companies are at different stages of maturity in applying assurance and may face various barriers or challenges that they need help to overcome. WBCSD considers the independence of IAASB’s decision-making to be a fundamental strength in supporting better EER assurance
Rodney Irwin, Managing Director of Redefining Value at WBCSD said, “The scale of the challenges we face in moving towards a system that considers financial and nonfinancial information requires unprecedented collaboration. We have chosen to work with the IAASB because of their internationally renowned methods of setting the highest standards and encouraging companies/countries to adhere to them. We look forward to a working together towards an economy that values the true cost, true profit, true value of business.”
Work will begin in December 2017 and draft guidance on key challenges is expected to be published in Q4 2018.