Accelerating jurisdictional implementation of sustainability disclosure and assurance standards

Recommendations and actions

Below summarises key recommendations for regulators and policymakers, along with the actions required to implement them in three sections.

Sustainability disclosure and assurance

1. Take a phased approach informed by market maturity

Challenge: Introducing mandatory sustainability disclosure and assurance too quickly can overwhelm preparers, reduce quality and create excessive administrative burdens. Poor-quality disclosures can lead to qualified assurance opinions, confuse investors and distort capital allocation. 

Specific recommendations:

• Evaluate market readiness
• Take a phased implementation approach
  • Include a voluntary phase
  • Use transition reliefs
  • Begin with limited assurance
• Seek feedback
  • Implement a pilot phase
  • Conduct targeted engagement
  • Use regulatory sandboxes to gather insights
• Be pragmatic
• Ensure legal and practical feasibility
  • Include disclosure requirements on a ‘comply or explain’ basis initially
  • Prioritise guidance over penalties in the early years

2. Engage proactively and learn

Challenge: Fragmented or limited dialogue within and across jurisdictions and with international standard setters can result in misaligned disclosure requirements and duplicated effort, resulting in reduced comparability of sustainability information and higher compliance costs. 

Specific recommendations: 

Collaborate with policymakers, standard setters and regulators across global, regional and individual jurisdiction levels

• Engage actively in international standard setting
• Promote coordinated supervision and governance
• Leverage international experience
• Seek feedback from stakeholders
• Establish mechanisms for raising implementation issues

The report contains practical examples drawing on work already performed by regulators and others in the UK and China.  

3. Build capacity and competency across the market

Challenge: Limited practical implementation guidance and widespread skills shortages make it challenging for entities to translate sustainability requirements into high-quality, decision-useful information. 

Specific recommendations: 

• Provide guidance to support consistent implementation
• Create a central information hub
• Mandate structured training and certification
• Strengthen capacity across the finance and accountancy profession

4. Leverage digital tools and enhance data quality

Challenge: Relying on outdated or fragmented tools for data collection and analysis can reduce the efficiency, accuracy and transparency of sustainability disclosure and assurance.

Specific recommendations: 

• Harmonise digital collection and reporting of data
• Promote digital tools and platforms
• Support SMEs with digital tools

5. Publish a clear roadmap with defined milestones

Challenge: Delays in defining timelines, standard-setting processes and mandatory requirements create uncertainty for preparers and assurance providers, hindering their ability to plan, align and build capacity for future sustainability disclosure and assurance. 

Specific recommendations: 

• Publish a clear roadmap
• Coordinate internationally where feasible

Sustainability disclosure

Challenge: Without alignment to a global baseline, entities risk facing fragmented and inconsistent disclosure requirements, increased administrative burdens and reduced transparency and comparability for investors. 

Specific recommendations: 

• Adopt and build on a global baseline
• Be pragmatic
• Ensure alignment of requirements within jurisdictions

Sustainability assurance

1. Clarify terminology, expectations and scope

Challenge: Inconsistent terminology and unclear expectations can erode confidence in sustainability assurance and the underlying disclosures. Preparers and users may be uncertain about the differences between assurance types, their comparability with statutory audits, and the level of confidence provided.

Specific recommendations: 

• Clarify sustainability assurance terminology
• Protect key assurance terms
• Bridge the expectation and understanding gaps
• Adopt a proportionate, risk-based approach
• Use clear visual cues in disclosure

2. Use ISSA 5000 and provide implementation support

Challenge: Progressing without clear and consistent assurance standards risks market fragmentation, uneven quality and confusion among providers and users, potentially leading to disputes over disclosure interpretation, which undermine trust and confidence. 

Specific recommendations: 

• Align national standards with ISSA 5000
• Ensure clarity and reliability in disclosure requirements
• Draw on strong ethical and quality-management frameworks
• Establish mechanisms to resolve interpretation queries

3. Facilitate a diverse and efficient market of assurance providers

Challenge: A market dominated by a few large firms, or only a specific type of firm, limits competition and diversity and isn’t appropriate, given the breadth of sustainability areas that may need to be assured. Concentration reduces the range of skills and perspectives needed to address the complex, multidisciplinary nature of sustainability topics. 

Specific recommendations: 

• Promote plurality and competition in the assurance market
• Facilitate collaboration between statutory auditors and sustainability assurance practitioners
• Enable group-level assurance across jurisdictions

4. Establish an oversight regime for sustainability assurance providers

Challenge: Without a robust oversight regime, sustainability assurance providers risk divergence in competence, ethics and independence, undermining credibility and trust.

Specific recommendations: 

• Establish a robust oversight regime for sustainability assurance providers
• Adopt a phased implementation approach
• Communicate clearly and transparently