The International Ethics Standards Board for Accountants (IESBA) has launched two exposure drafts (EDs) for public consultation.
The two EDs set forth a suite of global standards on ethical considerations in sustainability reporting and assurance.
The proposed standards aim to foster greater trust in all publicly communicated sustainability information through the application of a consistent ethical approach. The two EDs are:
- International Ethics Standards for Sustainability Assurance ED, which includes revisions to the existing Code related to sustainability reporting;
- Using the Work of an External Expert ED
The Exposure Draft on International Ethics Standards for Sustainability Assurance (including International Independence Standards) (IESSA) and ethics standards for sustainability reporting proposes a clear framework of expected behaviours and ethics provisions for use by all sustainability assurance practitioners regardless of their professional backgrounds, as well as professional accountants involved in sustainability reporting. The goal of these standards is to mitigate greenwashing and elevate the quality of sustainability information, thereby fostering greater public and institutional trust in sustainability reporting and assurance.
The Exposure Draft on Using the Work of an External Expert proposes an ethical framework to guide professional accountants or sustainability assurance practitioners, as applicable, in evaluating whether an external expert has the necessary competence, capabilities and objectivity in order to use that expert’s work for the intended purposes. The proposals also include provisions to aid in applying the Code’s conceptual framework when using the work of an external expert.
These proposed ethics (including independence) standards are especially relevant in a context where sustainability information is increasingly important for capital markets, consumers, corporations and their employees, governments and society at large, and when new providers outside of the accounting profession play a prominent role in sustainability assurance.
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IESBA chair Gabriela Figueiredo Dias said: “Ethics is about acceptable behaviours and right decisions to avoid bias in sustainability information and foster trust. From investors looking for transparent and credible information, to consumers wanting to ensure the reliability of companies’ narratives about the sustainable credentials of their products and practices, and companies wanting to be trusted, all users of sustainability disclosures have a vested interest in ensuring ethical choices by the preparers and assurers of such information. These proposed standards will serve as a cornerstone of ethical behaviour with far-reaching benefits.”
The development of the standards was preceded by extensive outreach, including four global roundtables which took place in March and April 2023 in Paris, Singapore, Sydney and New York. The roundtables involved over 140 senior-level representatives from stakeholders from very different jurisdictions and backgrounds, with a significant participation of non-professional accountants.
Earlier this month, IESBA welcomed three new members