The International Ethics Standards Board for Accountants (IESBA) has introduced the Global Ethics Sustainability Standards, a comprehensive set of guidelines designed to enhance the integrity and quality of sustainability reporting and assurance. The new standards encompass the International Ethics Standards for Sustainability Assurance (IESSA), revisions to existing sustainability reporting protocols, and a new standard on the ethical use of external experts’ work.
These standards are founded on core ethical principles, providing a solid framework for delivering high-quality sustainability information. The standards aim to address the unique challenges inherent to sustainability reporting, including the use of immature data and systems and the forward-looking nature of sustainability information.
Key features of the new Global Ethics Sustainability Standards include:
- Coherent Ethical Infrastructure: The standards create a fit-for-purpose infrastructure to support sustainability reporting and assurance, guiding practitioners to navigate challenges such as data limitations and predictive uncertainty.
- Mitigating Unethical Conduct: A primary focus is on reducing risks of greenwashing and other unethical practices. The standards provide guidance to help practitioners address potential ethical threats, including non-compliance with laws and regulations (NOCLAR), pressure to act unethically, independence issues, and concerns over external expert involvement.
- Investor Protection and Trust: By aligning best ethical practices, the standards aim to enhance investor protection and build trust in sustainability information, ensuring that sustainability reports are accurate and reliable.
- Ethical Decision-Making: The standards promote strong ethical judgment, aiming to prevent reputational risks and fostering a culture of integrity that attracts skilled professionals committed to sustainability.
As part of this initiative, IESBA has also outlined a principles-based framework for the ethical use of external experts’ work. This guidance helps professionals assess the competence, objectivity, and capabilities of external experts and emphasizes the ethical responsibilities when incorporating their work into sustainability assurance engagements.
For more detailed information, including the final pronouncement and supporting resources like fact sheets and webinars, IESBA provides resources to assist with the implementation of the new standards.
The IESSA and related revisions address critical risks to the quality of sustainability assurance, such as bias, conflicts of interest, and fraud, and provide a global baseline for the ethical conduct and independence of practitioners involved in sustainability assurance engagements. These standards are designed to uphold the integrity of sustainability reporting and safeguard the profession from unethical practices, ensuring high-quality, transparent, and trustworthy sustainability information.
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