Will ISSA 5000 survive the Omnibus turbulence?

The International Standard on Sustainability Assurance (ISSA) 5000, issued by the International Auditing and Assurance Standards Board (IAASB), is the first comprehensive framework designed to guide assurance practitioners in evaluating and providing assurance on sustainability-related information, aiming to strengthen trust and confidence among investors, regulators, and other stakeholders. Applied in the context of the Corporate Sustainability Reporting Directive (CSRD), ISSA 5000 was expected to be a major step in enhancing the credibility and reliability of sustainability reporting, but the recent “Omnibus Simplification Package” (Omnibus) may change its market appetite. 

Introduction of Omnibus and its impact on ISSA 5000

As of mid-February 2025, more than 70 CSRD reports in 16 European jurisdictions have already been published under the limited assurance of ISAE 3000 (Revised). Companies from Wave 1 (large public interest entities with more than 500 employees) made good efforts to meet the requirements of the newly established European Sustainability Reporting Standards (ESRS). Some of the companies have indicated quite a high level of readiness leveraging their prior sustainability reporting under the different available frameworks — including the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), or Non-Financial Reporting Directive (NFRD) — while others have gone through a more sophisticated process of navigating these standards for the first time. Finally, some companies aimed to outperform by example, while others focused on meeting only the minimum requirements. This highlights the significant segmentation among market participants within the framework of the common EU directive.

The most challenging areas of reporting, where companies lacked information, included estimates, links with financial information, long-term targets, scenarios and particularly data across the entire value chain. As a result, some but not many of the assurance reports contained an emphasis on the Double Materiality Assessment (DMA) process, quantitative metrics and monetary amounts. The larger portion, nevertheless, had a clear conclusion. Given the uncertainty, it is noteworthy that a significant number of companies are already making good progress in preparing their sustainability reporting, being able to break the ice, which is important and should be maintained and carried forward. 

Currently, the changes proposed by the Omnibus published on 26 February 2025 are driven by strong pushback from businesses and other stakeholders advocating for simplification, delays in implementation, and easing of the CSRD requirements. While these concerns are understandable, they should not serve as a reason for discouragement among the companies in the first group. These are the companies that have the potential to drive the market development and establish the rules for the new normal.

The publication of the Omnibus may shift the perception and application of the assurance standards. As communicated in the proposal, there will be no further requirement for reasonable assurance for ESRS compliant sustainability reporting. Furthermore, instead of mandating the Commission to adopt sustainability assurance standards by 2026, the new direction will focus on establishing assurance guidelines, offering a more flexible and responsive approach to emerging needs. 

This shift not only removes the requirement for sustainability statement assurance but also significantly impacts the market. What comes next for ISSA 5000 - whether this will be maintained for other types of sustainability reporting or remain dormant - is still uncertain.

The genesis of ISSA 5000

So far, companies have received limited assurance on their sustainability statements. This is not only due to a lack of standards but also due to the limitations and premature state of practices in reporting in a comparable and consistent way among many of the EU entities. With the evolution of the sustainability reporting standards, the need for more comprehensive and relevant assurance standards has evolved. This evolution should allow firms to tackle different areas of sustainability disclosures, including the estimates, forward-looking information, greenhouse gas emissions, as well as the DMA process itself.

In this context, the introduction of the ISSA 5000 standard in December 2026 was expected to lead to a significant shift in the landscape of sustainability reporting. As the first global standard for sustainability assurance, ISSA 5000 utilizes a new approach for more rigorous and transparent sustainability practices. While it is already approved and published, currently its application is voluntary until 2026. 

How ISSA is different from ISAE

The ISSA 5000 standard is set to prepare the market for a more accurate approach to sustainability assurance, ensuring that investors, regulators, and stakeholders can rely on accurate, verifiable, and comparable sustainability data. While both ISSA 5000 and ISAE 3000 (revised) are assurance standards. They differ as far as their scope, applicability and frameworks are concerned.

• Scope: ISSA 5000 applies concepts which are consistent to those of ISAE 3000 (revised), however, it additionally meets the particular needs of sustainability reporting and addresses both limited and reasonable assurance levels
• Applicability: While ISAE 3000 (revised) serves as a general standard for reporting on a wide range of subject matters, ISSA 5000 provides more specific requirements and guidance for key sustainability areas of priority.
• Frameworks: If ISSA 5000 is applied, there is no further need to also comply with ISAE 3000 (revised), as this overarching standard is also compatible with The International Ethics Standards Board for Accountants (IESBA) Code for ethical requirements. 

Being tailored to the sustainability reporting needs, ISSA 5000 is designed to allow more structured assurance requirements. The guidelines which are now on the agenda of the Commission to be developed by 2026 will carry somewhat a short-term nature, as they will be targeted specifically to meet the requirements of the current “less burden”, “less cost”, “less administration” demand. However, companies are still encouraged to take the lead in voluntary reporting, which could shift the industry from a regulation-led approach to a market-driven reporting standard. If businesses choose to report and seek assurance on their sustainability disclosures, they may set a new trend where strong sustainability reporting becomes the norm, not because regulations require it, but because market expectations and industry leadership drive it.

Besides, it is also designed to allow the assurance of the forward-looking information, reflected in the development of the targets, transition plans, scenarios and risks, as well as detailed decarbonization plans. It is broadening the scope of what can be verified under the estimations, including those related to greenhouse gas emissions, carbon pricing models or other unavailable data. However, it remains uncertain how the specific guidelines will address these issues, the level of detail they will provide, and whether they will uphold the concept of assuring forward-looking information. They may either build upon the ISSA 5000 approach or be developed according to a separate agenda.

Challenges that ISSA 5000 will still not resolve

With the introduction of Omnibus, ISSA 5000 might not be a top priority in the upcoming couple of years. However, the strategic development of the sustainability agenda is still important and sooner or later the need for sustainability assurance standards will return as the market and the reporting processes mature. It will still need to maintain the same level of authority as assurance standards on financial audit or other information. The standards as they currently stand will still encounter some limitations in providing assurance on assumptions, forward-looking information, and judgmental areas. While it represents a step forward compared to other assurance standards, it will continue to face scrutiny and refinement before it can be effectively applied across specific industries and different company sizes. Moreover, as sustainability reporting standards are constantly evolving, there may come a time when these standards no longer cover all relevant aspects, which means it will also change its content and requirements over time. So probably this is a good time and opportunity for learning and understanding the further issues posed by sustainability reporting and tailoring to emerging needs.