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Sustainability Reporting and Assurance: A Focus on Ethics and Independence

Demand for timely, accurate, and relevant sustainability information has risen dramatically in recent years. For sustainability reporting to meet the needs of stakeholders in the public interest, the infrastructure that supports sustainability reporting and assurance must be underpinned by high standards of ethical behavior and independence together with a robust system of quality management, oversight and enforcement.

Project overview

In 2022, recognizing the foundational role of ethics and independence in the production, reporting and assurance of sustainability information, the IESBA committed to taking timely action to develop fit-for-purpose, globally applicable ethics and independence standards as a critical part of the regulatory infrastructure to support transparent, relevant and trustworthy sustainability reporting.

Importantly, this strategic commitment set up the IESBA’s ethics and independence standards as the third pillar to trustworthy sustainability reporting and assurance, alongside the standards being developed by the International Sustainability Standards Board (ISSB) and the International Auditing and Assurance Standards Board (IAASB). 

IESBA Establishes a Sustainability Reference Group

IESBA's Sustainability Reference Group (SRG) has been established to support the work of its Sustainability Task Force. The SRG members have been selected based on a series of criteria, including their background, experience or expertise in sustainability reporting or assurance, stakeholder groups, and geographical location. The members will act as a “sounding board” to the Sustainability Task Force, providing insights, expertise, or advice relating to the development of global ethics and independence standards for sustainability reporting and assurance. 

The SRG will be chaired by Mr. Channa Wijesinghe, IESBA Member and Sustainability Task Force Member.

 

The SRG Members are: 

Objectives of Sustainability Reference Group (SRG)

  • To act as a sounding board to the IESBA’s Sustainability Task Force on proposals relating to the development of global ethics and independence standards for sustainability reporting and assurance (“IESBA sustainability standards”).
  • To provide insights, expertise or advice on identified areas or matters relating to the development of the IESBA sustainability standards.
  • To provide input to, or otherwise assist in, the development of non-authoritative guidance material relating to the application of the IESBA sustainability standards.

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June 2023 update from Mark Babington, IESBA Working Group Chair

"Since the IESBA Board last met, the Sustainability Task Force has continued to work intensively to address the challenge of developing the Code of Ethics to respond to the challenges posed by sustainability reporting and assurance. In doing so we have carefully considered IOSCO’s encouragement to develop profession agnostic standards that can be used for all those who work in the Sector. In March and April we convened four, multi-stakeholder round tables to inform our understanding of the issues that need to be addressed, benefitting from excellent discussions and insight. In May we met in Lisbon, and set out proposals for revisions to the Code in principle, which the Board will now be asked to consider and provide its feedback, and will be able to also see draft text of new sections which will allow IESBA to deliver on its public interest mandate. At the same time there has been further extensive stakeholder outreach. We are in a good position to discuss our proposals thanks to the work of the Task Force, supported by the excellent IESBA staff team." 

New: Ethics Considerations in Sustainability Reporting: Including Guidance to Address Concerns About Greenwashing

The IESBA is committed to being part of the rapidly progressing developments regarding sustainability reporting and assurance and providing timely responses to ethics and independence-related concerns.

This publication is intended to highlight the relevance and applicability of the Code to several ethics-related challenges arising from professional accountants' involvement in sustainability reporting and assurance, especially circumstances related to misleading or false sustainability information (i.e., "greenwashing").