IOSCO outlines considerations for ESG assurance
The International Organization of Securities Commissions (IOSCO) has unveiled its latest report, outlining key considerations for establishing a reliable global assurance framework for sustainability-related corporate reporting.
As the global regulatory landscape for assurance over sustainability-related information currently depends on voluntary usage, practices vary widely. IOSCO has observed growing demand amongst investors for assurance of this information. To enhance quality, transparency, and connectivity between climate-related disclosure and financial statements, IOSCO highlights the importance of globally consistent and comparable assurance and ethics standards.
To achieve this, the report calls for profession-agnostic standard-setting that is highly responsive to the public interest and involves early engagement with preparers, investors, and providers. Additionally, IOSCO emphasises the need for capacity building across the entire sustainability reporting ecosystem. This is a crucial task already being addressed by the ISSB. On assurance of digital tagging of reported information, the report found mixed views – with those that support digitalisation calling for independent assurance on the tagging of the information to be built in as standards are developed rather than retrofitted afterwards.
Assurance standards for sustainability information are currently being developed by the International Auditing and Assurance Standards Board and the International Ethics Standards Board for Accountants, with drafts expected later in 2023. IOSCO encourages stakeholders to continue to engage with this process, while keeping connectivity between sustainability information and financial statements at the forefront.
Here at XBRL International we share the view that high-quality assurance is critical to building trust and confidence in sustainability disclosures, which in turn can drive more informed decision-making by investors. In particular, of course, we encourage the development of global assurance standards for digital reporting of all kinds of corporate disclosures, to promote transparency and consistency, particularly in light of the growing investor demand for high-quality assurance over this data.
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