Regulations on Sustainability

The Code on Sustainability contains independence and ethics standards for sustainability assurance and sustainability reporting. After the International Auditing and Assurance Standards Board (IAASB) had already adopted the ISSA 5000 standard for the assurance of sustainability information on September 20, 2024 (“Neu auf WPK.de” from September 25, 2024 - in German), the IESBA is now following suit with its draft professional regulations.

Like ISSA 5000, the proposed framework is designed to be principles-based and profession agnostic, meaning that the standards can be applied not only by the profession but also by other service providers. The IESSA also explicitly covers the Group Audit context.

The aim of the standard is to curb greenwashing and increase the quality of sustainability information in order to promote public and institutional confidence in sustainability reporting and its auditing.

Regulations on Experts

The regulations on experts set out a professional framework to assist professionals in assessing whether an external expert has the necessary competence, skills and objectivity to ensure that their work can be used for the intended purposes.

The final regulatory text is expected to be published in mid-January 2025 after the Public Interest Oversight Board (PIOB) has conducted the necessary review of the regulations (certification). The IESBA intends to publish a series of accompanying materials (Guidance & Application Materials) in the further course of the process.

Entry into Force

The regulations on experts and sustainability will come into force on December 15, 2026 (with the exception of Assurance Work Performed at Value Chain Components in accordance with Sections 5405 and 5406, which will not come into force until July 15, 2028). Earlier application is recommended.

Further Project decided

The IESBA has also approved the Firm Culture and Governance Project Proposal. It consists of two components. Firstly, changes to the Code are to be developed in the form of a framework that promotes and strengthens ethical behaviour in practices. Secondly, application aids and accompanying material (non-authoritative material) on this topic are to be developed outside of the Code.

The IESBA will publish a report on this in January 2025 and hold a total of three rounds of talks at various locations in March and April 2025 to gather input from relevant stakeholders.