Sustainability Questionnaire

Overview

What is the Purpose of this Questionnaire?

Stakeholders are invited to respond to this questionnaire to inform the work of the IESBA’s Sustainability Working Group. The Group is undertaking extensive stakeholder outreach to:

  • Understand how the Code is being used by individuals and firms who are involved in reporting and providing assurance on sustainability-related information.
  • Understand the specific activities that professional accountants in business and in public practice (including auditors) are undertaking in relation to the production, reporting and assurance of sustainability information with a view to identify/respond to the most pressing ethics (and independence) issues.
  • Inventory stakeholder suggestions about potential aspects of the Code that could be more specific in relation to sustainability reporting or assurance, thereby laying the groundwork for the Board’s anticipated need for prompt standard-setting action under its Strategy and Work Plan 2024-2027.

How to Participate in IESBA’s Stakeholder Outreach?

  1. Stakeholders interested in engaging with the Sustainability Working Group should contact communications@ethicsboard.org. In addition, stakeholder can also submit a written response to the questions in this document via email.

Background 

A Changing Landscape – Increasing Demand for Sustainability Reporting and Assurance

  1. Financial markets have seen an accelerated growth in the disclosure of sustainability information driven largely by a major shift in investors’ capital allocation to businesses perceived as more sustainable, viewed through the environmental, social and governance (ESG) prism. As market demand for sustainability information continues to expand rapidly, there is a pressing public interest need to ensure that such information is reliable, comparable, trustworthy, and not misleading. In this regard, the applicability of high-quality ethics (and independence) standards cannot be overstated.
  2. Increasingly, sustainability reporting and assurance is being provided by non-professional accountants. Investors and other users of sustainability reporting may be ambivalent as to who carries out this work, but they are very clear that they have the same high expectations that the work is carried out to rigorous technical and ethics standards.
  3. Many regulators and standard setters are prioritizing as a matter of urgency the development of new regulations and standards governing sustainability disclosures and assurance thereon in response to this public interest need. Increasingly, stakeholders are centering on ethics as they focus on the essential components for ensuring the reliability, accuracy, and trustworthiness of sustainability data/ information

Preparing and Presenting Sustainability Information 

  1. The principles-based provisions in the Code set out Part 1 – Complying with the Code Fundamental Principles and the Conceptual Framework and Part 2 – Professional Accountants in Business apply to all professional accountants when preparing and presenting sustainability information.

Providing Assurance on Sustainability Information

The Code, including the independence provisions in Part 4B – Independence for Assurance Engagements Other than Audit and Review Engagements apply to all professionals (including non-PAs) who provide assurance on sustainability information in accordance with the IAASB’s International Standard on Assurance Engagements (ISAE) 3000 (Revised).

 

A. Questions for Investors, Analysts and Rating Agencies, and Other Users of Sustainability-related Information 

  • Is assurance on sustainability information mandatory in your jurisdiction?
  • What are users’ sustainability reporting needs? What are the top three matters that you would like to see covered?
  • What is sustainability information used for? How are you using sustainability-related information for capital allocation decisions?
  • Do you believe sustainability-related information should be audited by an independent assurance provider in order for it to be trusted and used?
  • Do you believe that the same level of assurance and relevant ethics and independence standards that apply to financial information should apply to sustainability information?
  • Where do you access sustainability reports? Digital or print?
  • What works and what doesn’t work with in current sustainability reports? By way of example, please indicate the names of organizations that you believe produce high quality sustainability reports?
  • Are there any other matters that you believe IESBA be aware of in progressing its sustainability workstreams?
 
 

B. Questions for Those Those Charged with Governance and Preparers of Sustainability Reports  

  • What is the purpose of sustainability reporting in your organization? Who is the intended audience?
  • What is the content and format of the sustainability reports prepared by your organization? What topics are covered? What is the standard or benchmark used to prepare them?
  • Who is involved in preparing and presenting sustainability-related information in your organization? How are the reports prepared? What technologies are used? What organizational controls are in place?
  • Who is preparing reports? What are their skills and expertise? Do preparers of sustainability information adhere to a Code of Ethics such as the IESBA Code?
  • Is assurance on sustainability information mandatory in your jurisdiction? Who provides such assurance? (a) audit firm other than auditor of financial statements? (b) auditor of financial statements? (c) non-audit firm?
  • What is the level of assurance that your organization is receiving now? Is the audit committee or others responsible for governance of your organization involved in appointing the sustainability assurance provider?
  • What is the level of involvement of the organization’s financial statement auditor in sustainability assurance? Are there any advisory services related to the preparation of sustainability-related information provided by the auditor of the financial statements?
  • How are sustainability reports for your organization disseminated?
  • Are there any other matters that you believe IESBA be aware of in progressing its sustainability workstreams?
 
 

C. Questions for Professionals who Advise Clients or Provide Assurance on Sustainability-related Information, Including Those that are Not Professional Accountants 

  • What ethics-related challenges are you facing in advising clients on sustainability-related matters? What are the specific threats to compliance with the fundamental principles of ethics (i.e., integrity, objectivity, professional competence and due care, confidentiality, and professional behavior) identified? How have you addressed such threats?
  • Who is the intended audience for the assurance report? How is the assurance report delivered? Is the assurance report publicly available?
  • What framework/ standards do you use in providing assurance on sustainability-related information (e.g., ISAE 3000 Revised, ISAE 3410, other)? Please indicate specific practical challenges that are experienced in applying the existing framework/ standards.
  • What ethics and independence standards do you apply when providing assurance on sustainability-related information? Is the IESBA Code used? If yes, please indicate the specific parts/sections of the IESBA Code that is used.  
  • What is the main challenge with assuring sustainability-related information?
  • How does the firm ensure that sustainability assurance engagement teams have the  appropriate level of expertise?
  • What processes are in place to monitor changes in relationships, services being provided and other activities that might impair the independence of the assurance team? 
  • What information is available about the ethics and independence standards that sustainability assurance providers comply with? Where is such information disclosed?
  • What information is provided to those charged with governance about the sustainability assurance engagement?
  • Are there any sustainability-related advisory services provided to your financial statement audit clients? What are they?
  • How is compliance with ethics and independence standards monitored and enforced in your jurisdiction?
  • Are there any other matters that you believe IESBA be aware of in progressing its sustainability workstreams?
 
 

D. Questions for Regulators and Audit Oversight Authorities, Including Monitoring Group Members

  • Compliance with a Code of Ethics, such as the IESBA Code help professional accountants to act ethically (i.e., act with integrity, be objective and competent etc.,) and maintain a public interest mindset. This in turn helps in ensuring that the outcome of their professional activities (i.e., any information that is prepared or presented) is reliable, comparable, trustworthy, and not misleading.
    • Who in your jurisdiction regulates or develops standards related to sustainability reporting?
    • Is there specific regulation relating to the provision of assurance on sustainability information (a) on a voluntary basis; (b) on a mandatory basis?
    • What is the main challenge with assuring sustainability-related information?
    • Is there a Code of Ethics/ Code of Conduct that preparers of sustainability-related information are required to comply with? How are preparers of such information held accountable to acting ethically?
    • How is compliance with that Code of Ethics monitored and enforced? What are the consequences of intentionally (or unintentionally) reporting misleading or unsubstantiated sustainability information?
  • Compliance with the International Independence Standards helps firms that undertake assurance engagements act ethically (e.g., be objective, act with integrity), be independent and exercise professional skepticism. This helps in enhancing the quality and credibility of the information upon which they opine.
    • Who in your jurisdiction regulates mandatory assurance of sustainability information?
    • What are the ethics and independence standards that apply in your jurisdiction when providing assurance on sustainability information? What are the other professional standards that apply?
    • How is compliance with ethics and independence standards monitored and enforced? How is compliance with other professional standards monitored and enforced?
    • Are there specific activities, services, relationships, or interests that you believe will compromise a sustainability assurance provider’s independence? Why? Do you believe that there are actions that might be appropriate safeguards to address these independence concerns?
  • Are there any other matters that you believe IESBA be aware of in progressing its sustainability workstreams?
 
 

E. Questions for International and National Standard-setters, including Professional Accountancy Organizations

  • How have you considered professional ethics (e.g., integrity, objectivity, professional competence and due care) in progressing your project/ initiative?
  • To what extent have reference to appliable ethics provisions been made?
  • Are there specific communication requirements with those charged with governance about:
    • The production and presentation of sustainability information (between preparer and those charged with governance).
    • Significant matters relating to the sustainability assurance engagement (between assurance practitioner and those charged with governance).
  • Are there any other matters that you believe IESBA be aware of in progressing its sustainability workstreams?
 
 

F. Questions for Others, including Policy Makers, Researchers, Academics, and Influencers

  • Have you considered the relevance of professional ethics such as the International Code of Ethics for Professional Accountants (including International Independence Standards) in progressing your sustainability reporting or assurance initiatives?
  • What works and what doesn’t work with in current sustainability reports? By way of example, please indicate the names of organizations that you believe produce high quality sustainability reports?
  • To what extent should accountancy education cover sustainability reporting and assurance? What are some of the specific skills that might be relevant (e.g., communication, technology)? Do you believe that there is sufficient knowledge of the IESBA Code and other professional standards by those who prepare and assure sustainability information.
  • Are there any other matters that you believe IESBA be aware of in progressing its sustainability workstreams?
 
 

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