9. Sustainability Reporting Assurance

Question 1

What is sustainability?

(UN World Commission on Environment and Development definition)

Answer 1

Sustainability is “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

e.g. Renewable energy, Optimising supply chains to reduce GHG, Donating to sustainability local community projects.

Question 2

What are sustainability metrics (KPI’s) ?

Answer 2

Metrics allow a company to measure its sustainability performance.

Main reason to find out if the company is meeting its objectives on that or not. e.g. How much of their energy is from renewable against their target of 80% etc.

Question 3

What is sustainability reporting?

Answer 3

Sustainability reporting assesses an organisation’s environmental, social, and governance (ESG) effects, examining its operations, risks, strategies, and achievements in sustainability.

Question 4

What are the benefits of assurance on reported sustainability information?

Answer 4

1. Positive brand and competitive advantage
2. Greater visibility across the value chain
3. Compliance with standards and regulation

Question 5

What are the 5 key elements of an assurance engagement on sustainability information?

Answer 5

1. Three-party relationships
2. Subject Matter
3. Suitable criteria
4. Sufficient appropriate evidence
5. Assurance report

Question 6

What are the key requirements of International Standard on Assurance Engagements (UK) 3000 (ISAE 3000), before the engagement, planning the engagement, gathering evidence and reporting stages?

Answer 6

1. Before starting the assurance engagement
   * Ethics and independence
   * Competence
   * Agreeing and documenting the engagement terms
2. Planning the assurance engagement
   * Understanding the client’s reported sustainability metrics and information
   * Understanding the subject matter and criteria
   * Understanding the expertise, qualifications and knowledge of staff
   * Consideration of resources – whether an expert may be required
   * Planning further procedures
   * Setting an expectation of materiality
3. Gathering evidence
   * Perform the procedures planned
4. Reporting
   * Should express a conclusion on the level of assurance
   * Should contain an opinion

Question 7

What are the 5 key requirements of the EU’s Corporate Sustainability Reporting Directive?

Answer 7

1. Comprehensive reporting on sustainability matters
2. Detailed disclosure categories
   * Employee health and human rights
   * Anti-corruption and bribery
   * Diversity
   * Environmental impact
3. Specific information to be reported
   * Risk and opportunity management
   * Sustainability targets
   * Sustainability policies
   * Incentive schemes
   * Adverse sustainability impacts
4. Dedicated reporting section
5. Gradual assurance levels

Question 8

What are the 6 key areas that will be covered by ISSA 5000?

(International Standard of Sustainability Assurance)

Answer 8

1. Extent of work
2. Suitable reporting criteria
3. Scope of assurance engagement
4. Evidence
5. Internal control systems
6. Materiality

Question 9

What are the 4 key requirements of IFRS S1 and 3 key requirements for S2?

S1: Disclosure requirements for sustainability-related
information

S2: Climate-related disclosures

Answer 9

S1:
Must report on:
1. Governance
2. Strategy
3. Risk management
4. Metrics and targets

S2:
Must state their:
1. Climate related physical risks
2. Climate related transition risks

Question 10

What are the 7 advantages of sustainability assurance by accountants/auditors as opposed to other service providers?

Answer 10

1. Qualifications and training
2. Ethical requirements
3. Assurance skills
4. Collaboration with subject matter experts
5. Quality management
6. Understanding of the client
7. Focus on public interest