Introduction

On 24 February 2026 the Council, with a view to boosting EU competitiveness and following the European Parliament’s approval of a provisional agreement between MEPs and EU governments in December 2025, gave its final green light to a simplification of the sustainability reporting and due diligence requirements for companies. This legislation simplifies the directives on corporate sustainability reporting (CSRD) and corporate sustainability due diligence (CS3D or CSDDD) by reducing the reporting burden and limiting the trickle-down effect of obligations on smaller companies. Two days later on 26 February the EU published the final legal text in the Official Journal. The entire process took exactly one year (the Commission presented its proposal on 26 Feb 2025). 

While the process may now be formally closed, the real work is only just beginning. Transposition starts 20 days after today's publication. Member States have 12 months to implement the CSRD amendments, while changes to the CSDDD must be applied by 26 July 2028. The key changes are:

 

CSRD

Sustainability reporting will only be mandatory for companies employing on average over 1,000 employees and with a net annual turnover of over €450 million. The rules will also apply to non-EU companies with net turnover in the EU of over €450 million and to their subsidiaries and branches generating turnover higher than €200 million in the EU. The reporting requirements will be significantly simplified (see ESRS Developments below) and sector-specific reporting will be voluntary. To protect smaller firms from being overburdened with demands for sustainability information, companies employing less than 1,000 employees will not have to provide information to their bigger business partners beyond what is included in the voluntary reporting standards (this is the value chain cap).

 

CSDDD

Fewer companies will need to carry out due diligence on reducing their negative impact on people and the planet. Under the revised rules, this will only be required from large EU corporations with more than 5,000 employees and a net annual turnover of over €1.5 billion and for non-EU companies above the same turnover threshold in the EU. They will have to carry out scoping exercises to identify risks in their chain of activities and they should only ask for information from business partners with fewer than 5,000 employees when the information for in-depth assessment cannot be obtained another way.

Transition plans ensuring a company’s business model is compatible with the shift to a sustainable economy will no longer be required. Businesses will be liable at the national level for failures to apply the rules correctly and could face fines of up to 3% of the firm’s net worldwide turnover. The due diligence directive will only apply from 26 July 2029.

 

Guidance

Frank Bold has this business knowledge and implementation centre to help businesses understand and implement the EU’s sustainability legislation and on 24 February 2026 published this full analysis of the revised CSDDD. Accountancy Europe has also issued two factual analyses of the Omnibus Directive amending the CSRD and CSDDD Tthat provide an overview of the key changes to sustainability reporting and assurance as well as due diligence requirements across Europe. 

 

Reaction

The ICSRG echoes Accountancy Europe’s views on the revised rules: disappointment at the narrowing of the scope of the CSRD - this research paper reveals a 90% reduction in scope from the original CSRD - but welcome closure on the file, the value chain cap, and the decision to adopt a sustainability assurance standard by 1 July 2027. However, the CSRD and CSDDD have survived intense efforts by the US Administration to deregulate even further as this Financial Times (FT) article (subscription) explains.. This Frankly Speaking podcast assesses what the Omnibus 1 means for the effectiveness of sustainability legislation in the EU.

Draft Simplified ESRS Unveiled 

In early December 2025, following their formal approval by its Sustainability Reporting Board (SRB),  EFRAG submitted the suite of draft simplified ESRS, essentially its technical advice, to the EC and publicly unveiled them at the EFRAG 2025 Conference. See the conference recording here and conference report here which summarises key points on the new simplified ESRS, as delivered to the European Commission, drawing on presentations by speakers and discussions during the panel sessions. 

The full set of the draft simplified ESRS can be found here and at a glance factsheet here. On 9 December 2025 Position Green held a webinar on the simplified ESRS – access the recording here and slides here. This Corporate Disclosures article takes a closer look at the simplifications. 

In less than six months EFRAG have significantly simplified the original ESRS. On many measures of size and burden the revised ESRS are less than half the original ESRS. At the same time EFRAG launched the ESRS Knowledge Hub, an interactive online platform to help users navigate the ESRS, including the VSME, and implementation materials developed by EFRAG.

In late December 2025 EFRAG announced the publication of the Basis for Conclusions, Cost–benefit analysis (CBA), and other documents to help stakeholders’ understand the draft simplified ESRS. The Basis for Conclusions explains how the feedback from the public consultation has shaped the amendments. 

The CBA estimates that the draft simplified ESRS will cut reporting costs by 44% compared to the original ESRS. Large companies (10,000+ employees) could save around €1.1 million per annum while smaller companies stand to save around €150k annually. Competitiveness effects, which have been touted as a key objective of the simplification exercise, are assessed as neutral. Companies themselves do not seem to think that significant competitiveness effects are created through ESRS simplification. The study also acknowledges possible downsides from reduced information though acknowledges these may be partly offset by improved usability.

 

Reaction and Next Steps

Accountancy Europe has welcomed EFRAG’s technical advice on Draft Revised ESRS but in this public statement urges the EC to avoid further simplification and succumbing to political pressure so as to ensure stability in the EU sustainability reporting ecosystem. SMEunited has welcomed the formal adoption by the Council of the Omnibus I simplification package but stress that for SMEs, it is now a priority to adopt the VSME through a delegated act, ensuring they are not asked for more data points than what is included in the VSME.

The EC has already launched the consultation process on EFRAG’s technical advice. The EC must adopt the amended ESRS by way of a delegating act by mid-2026. The EC may decide to make targeted adjustments in response to concerns about the additional reliefs introduced by EFRAG. The EC is consulting with eight EU bodies identified in the Accounting Directive, which include the ECB, the EBA and ESMA. Once the EC submits the final text, the Parliament cannot amend individual provisions; it can only object to the delegated act as a whole. If neither the Parliament nor the Council objects during the scrutiny period, the delegated act automatically enters into force. DG FISMA oversees the process and the period for feedback ended on 6 February 2026.

While it seems unlikely the EC will simplify further, by reducing datapoints even more, the EC is expected to focus on reliefs. Some reliefs do not have time limits so opening the door for companies to defer some of the most challenging disclosures indefinitely. ESRS 1 paragraph 94 allows companies to omit information related to IROs, the value chain, metrics and anticipated financial effects due to undue cost or effort which is beyond the relief available under ISSB Standards. And ESRS 2 paragraph 29 allows companies to omit quantitative information on anticipated financial effects of material risks or opportunities if they do not have the skills, capabilities or resources to provide it. In effect, these provisions create permanent reliefs rather than transitional ones. During EFRAG’s drafting process, both the European Central Bank (ECB) and the European Banking Authority (EBA) expressed concern about these. The EC is also expected to decide on phase-ins for Wave 2 companies. The amended ESRS include an additional significant phase-in until 2029 for Wave 1 companies for the disclosure of quantitative information on financial effects and substances of concern, but EFRAG deferred the decision on phase-ins for Wave 2 companies to the EC.

The ECB staff have published their opinion on the revised ESRS which mirror Eurosif’s assessment of EFRAG’s final advice. The staff opinion express concern that the numerous permanent reliefs, phase-ins and exemptions granted to preparers risk limiting the availability and comparability of meaningful data and to increase divergence from other international reporting standards such as the ISSB. The ECB staff regret the changes to certain critical datapoints, some removed and some now volutary, and the need for sectoral guidance for financial institutions’ disclosures. And the ECB staff say that the VSME is not suitable for small and mid cap firms, and recommends using the revised ESRS instead. 

Similarly the European Securities and Markets Authority (ESMA)'s verdict on the draft revised ESRS also expresses some reservations. ESMA finds the revised ESRS are only partly capable of meeting their objective of protecting investors and safeguarding financial stability and conclude by advising the EC to make adjustments including introducing time limits to certain permanent reliefs.

 

ESRS Datapoints

Sustainability Reporting Navigator, a team of German academics, have updated their ESRS Revision Impact Analysis to reflect the draft simpified ESRS handed to the EC. They find a 51% reduction in the number of mandatory data points, the impact being more pronounced for qualitative data points (58%) compared to a drop of 30% for quantitative data points. Of the data points retained in the revised ESRS, only 41% are legacy data points while the remaining 59% are new or amended data points, potentially triggering transition costs. Read the analysis here. The team have duly updated their ESRS revised datapoint list and provide the Excel sheet for free here and is editable.

 

Reflections of Retiring EFRAG SRB Chair

In this episode of Frankly Speaking (Youtube, Spotify and Apple) Richard Howitt spoke with Patrick de Cambourg, the outgoing chair of EFRAG SRB about the work of EFRAG, the ESRS simplification exercise conducted last year, and the future, amongst other things. 

 

Research on Reporting Practices

A German study published on 5 February 2026 that examined over 750 Wave 1 CSRD reports found that in the first year of reporting under the ESRS only 16% of companies provided information on the anticipated financial effects of their environmental risks.

Findings from the annual 'Sustainability Transformation Monitor' of German businesses (n=688) provide the first glimpse of post-Omnibus I reporting (see full report in German here and an English summary here. The survey reveals 75% of companies that have fallen out of the mandatory scope of CSRD (that is ‘descoped’) plan to issue a voluntary report in the coming years. Of these 52% have already reported and plan to continue while 48% plan to issue their first report. The survey also shows that the Omnibus has slowed reporting processes and/or reduced ambition among both in-scope companies and larger descoped firms.

 

Sustainability Reporting Standards for SMEs 

Since the European Commission officially adopted EFRAG’s Voluntary Sustainability Reporting Standard for non-listed Micro, Small, and Medium-sized Enterprises (VSME) as a Recommendation in late July 2025 EFRAG has been busy mobilizing implementation support (access the Commssion’s press release, Q&A, and the recommendation here and the standard, explainer videos, digital templates, and guidance on EFRAG’s website here. 

Most recently, on 27 February 2026, EFRAG announced Dutch and Irish translations and Data Migration tool now available. The new free Data Migration tool enables seamless upgrades to the latest template version in just a few clicks. This provides more accessibility and fewer errors. 

On 6 February 2026 EFRAG held the 2026 kick-off meeting of the SME Forum in which it presented its 2026 priorities along with the results of a survey into how to support VSME implementation at the national level. The meeting also included an introduction to the interactive VSME page on the ESRS Knowledge Hub, highlighting its functionalities and how it can support stakeholders in practice. Watch the recording here. EFRAG is planning a series of events for preparers, users and platforms in late February 2026, a VSME Community event on or around 13 March 2026 and second SME Forum meeting on or around 1 June 2026 - see EFRAG events schedule here. 

In December 2025 EFRAG held an open session of the 3rd EFRAG SME Forum Meeting in which it presented three new supporting guides and shared insights from the first VSME Market Acceptance Report. The progress report reveals growing market awareness and takeup of the VSME as well as benefits in the shape of improved access to finance, cost optimisation and strategic advantages. The report also identified challenges including limited training, unclear methodologies and insufficient supporting tools as well as the lack of a centralised digital repository. 

As explained here the report’s findings have prompted EFRAG to consider developing further practical guidance on specific disclosures, initiating a collection of practical examples of completed VSME reports to gather best practices, continuing work on the VSME Digital Template, and further mapping digital tools and platforms. EFRAG has already issued calls for expression of interest, with a deadline of 5 April 2026, for stakeholders to map digital platforms and tools such as GHG calculators. Read more here. In the near future EFRAG will launch a call for interest on collecting VSME reports (for organisations below 250 employees and those with 250–1,000 employees).

 

Omnibus VSME

The Omnibus outcome, rasing the threshold for mandatory reporting to 1,000 employees, has resulted in a much reduced CSRD scope. An additional 41,700 firms now fall under a voluntary regime. The Omnibus text states that the VSME is designed to both enable voluntary sustainability reporting by companies with fewer than 1,000 employees and limit the information that can be required from those companies in value chains. The voluntary reporting standard must be based on the VSME Recommendation in its original version. The EC is not likely to significantly revise it for companies with 250-1,000 employees. Rather the existing VSME will likely be renamed, maybe as the Voluntary ESRS (VESRS). Revised Article 29e envisages the launch of a dedicated portal that will include new templates and guidance suited to larger entoties. The EC must adopt the delegated act establishing the voluntary standards within four months of the Omnibus directive entering into force, that is by mid-2026, in concert with the adoption of the simplified ESRS. 

 

Connectivity Discussion Paper

Late last year EFRAG released its Discussion Paper on Connectivity of Financial and Sustainability Reporting. Comments are due by 30 June 2026. Read more here.

 

ECG Guidance for CSRD Wave 2 Reporters 

To support preparers of sustainability reports in the second year of reporting under the CSRD, the ECG has published a paper on some considerations for companies that can be accessed here.

 

Circular Economy 

This Corporate Disclosures article examines how the newly simplified ESRS E5 aligns with the 2020 EU Circular Economy Action Plan (CEAP) policy framework. ESRS E5 sets out requirements for disclosing policies, actions, targets relating to resource use and the circular economy, and metrics on resource inflows and outflows.

 

EFRAG Updates

EFRAG’s Sustainability Reporting Update podcast and the Financial Reporting Update podcast are available on Spotify here. Read the updates in pdf here.

 

Belgian Awards for Sustainability Reports (BAS)

Following its award ceremony late last year the Belgian Awards for Sustainability Reports (BAS) has initiated a series of workshops ot help preparers. Register for and access the workshop slides and recordings here.

 

European Securities and Markets Authority (ESMA) ESRS Compliance Table

ESMA have published a compliance table for the first years of application, highlighting that this is a learning period for companies, auditors, and authorities alike. With uneven transposition of the CSRD and the ongoing Omnibus revisions, the Guidelines on Enforcement of Sustainability Information issued in April 2025 give national competent authorities (NCAs) the flexibility to focus on key priorities rather than minor errors, support issuers through dialogue and guidance, and reserve formal enforcement for serious or repeated issues.

 

ISSB Adoption

The Jurisdictional Readiness Assessment Guide and associated tool are now available to support jurisdictions in assessing how prepared their markets are for the adoption or other use of ISSB Standards. As explained here the guide provides practical examples drawn from the experiences of some of the nearly 40 jurisdictions around the world that have already taken steps to adopt or otherwise use ISSB Standards. 

This webpage hosts a list of ongoing and completed jurisdictional consultations on sustainability-related disclosures following the publication of the ISSB's inaugural Standards in June 2023. On 27 February the IFRS Foundation reported that the Accounting and Auditing Board of Ethiopia has published a sustainability disclosure consultation: Ethiopia's [Draft] IFRS Sustainability Disclosure Standards Adoption Roadmap. Similarly And the Financial Services Commission of South Korean has published a sustainability disclosure consultation: Disclosure Roadmap.

On 25 February 2026 the UK Department for Business and Trade issued the final versions of the ISSB-aligned UK Sustainability Reporting Standards (UK SRS), following an eight-month consultation. In late January 2026 the UK Financial Conduct Authority (FCA) published a sustainability consultation, CP26/5—Aligning listed issuers' sustainability disclosures with international standards, that is open for comment until 20 March 2026. As this Corporate Disclosures article explains the UK FCA is proposing a comply or explain approach to Scope 3 and non-climate disclosures. 

Meantime China is building its sustainability reporting framework. In December 2025 the Ministry of Finance (MoF) released its final climate disclosure standard. While based on the ISSB’s IFRS S2 it differs from S2 hel activities advancing the use of ISSB Standards around the world, supporting the implementation of IFRS S1 and IFRS S2, and progressing standard-setting on nature-related risks and opportunities.

 

ISSB Nature Standard Setting

After the board formally decided to proceed with standard-setting activities on nature-related risks and opportunities at the end of 2025, the ISSB got started in earnest on its nature standard-setting project at its January 2026 meeting. The aim is to produce an exposure draft (ED) in time for the UN Biodiversity COP 17 in October 2026. The ISSB will draw on the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations, which have been voluntarily adopted by over 730 organisations. 

While the ISSB has not yet decided whether the ED will take the form of additional guidance or a standard with mandatory disclosure requirements, the Board unanimously agreed that the standard or guidance should encompass all nature-related risks and opportunities in line with the TNFD framework. The ISSB will, however, focus only on companies’ financially material risks and opportunities, whereas the TNFD also covers impacts and dependencies. The Board also unanimously agreed to proceed on the assumption that companies are already applying IFRS S1 and S2.  

In the coming months the Nature Positive Initiative (NPI) plans to issue its final framework of metrics for measuring the outcomes of companies’ nature-related policies. The NPI is giving stakeholders a last chance to review its proposals here. 

The world première of the new film ‘Becoming Nature Positive’, the seminal new project from the Nature Positive Initiative and Open Planet Studios, outlining the journey so far for a nature-positive future was held on 20 January 2026 in Davos. ‘Becoming Nature Positive’ stresses the urgent need to act. Read more here. 

This Guardian article of 20 January 2026 says in a recent report government intelligence chiefs have warned that the global attack on nature is threatening the UK’s national security. The increasingly likely collapse of vitally important natural systems would bring mass migration, food shortages and price rises, and global disorder.  

 

ISSB Implementation Support

The IFRS Foundation provides free, self-paced e-learning on the IFRS Sustainability Knowledge Hub that introduces the work of the ISSB, IFRS S1 and S2 and is designed to help professionals understand ISSB Standards and put them into practice. Eligible accounting professionals can earn CPD/CPE credits. Enrol in the e-learning here.

The ISSB has published four educational materials to help deepen preparers’ understanding of the concepts and mechanisms within ISSB Standards: i) identify sustainability-related risks and opportunities and determine material information here; ii) disclose information about anticipated financial effects here; iii) understand proportionality mechanisms built into the Standards here; and iv) explore connectivity between the financial statements and sustainability-related financial disclosures here. All ISSB support materials for IFRS Sustainability Disclosure Standards are hosted here. 

In early January 2026 the ISSB hosted the first episode of the ISSB Implementation Insight Podcast here. Presenters described the resources available to support companies understand and apply ISSB Standards, including responding to application questions and challenges, and implementation plans for 2026. Listen to podcast on Apple, Spotify, and Youtube. 

The IFRS Foundation is also establishing an Implementation Advisors Programme for independent advisors who are, or will, be supporting jurisdictions in their adoption or other use of ISSB Standards. The Programme is designed to enhance independent advisors’ familiarity with the ISSB Standards and IFRS Foundation’s tools and materials that are available to support regulators and to enable implementation partners and authorities to identify advisors with relevant experience and understanding of ISSB-related adoption considerations. Applications closed on 20 February 2026

ISSB Licensing

In this video learn how via licensing SASB Standards and mapping disclosures to SASB topics, FactSet enabled investors to focus on what truly impacts performance. Similarly in this video learn how Workiva licensed ISSB Standards and SASB Standards, integrating them directly into workflows so customers could focus on effectively managing sustainability risks. 

 

ISSB Alliance

The IFRS Sustainability Alliance brings professionals together to exchange perspectives and stay informed as sustainability standards develop. Learn more about becoming a member here.

 

Public Sector Standards 

While governments face risks related to climate change and extreme weather events, there has been a lack of clear public sector guidance on how to disclose them and inform accountability and decision-making. On 29 January 2026 the International Public Sector Accounting Standards Board (IPSASB) closed the gap by issuing IPSASB SRS 1, Climate-related Disclosures, the first-ever public sector standard to help governments and public sector entities report climate-related risks and opportunities clearly and consistently. IPSASB SRS 1 is aligned with IFRS S2 to enhance the consistency and comparability of climate-related disclosures across the public and private sectors for market participants, in particular for lenders and other resource providers.  IPSASB SRS 1 applies to an entity’s general purpose financial reports for annual reporting periods beginning on or after 1 January 2028. Earlier adoption is permitted. To support adoption on 12 February 2026 IPSASB hosted this global webinar where participants learned about the standard, posed questions, and explored practical implementation strategies. 

On 22 January 2026 the IPSASB issued a new IPSAS Standard to address the need for guidance: IPSAS 51, Tangible Natural Resources Held for Conservation. IPSAS 51 introduces new, public sector-specific accounting guidance on accounting for natural resources with physical substance, such as land, trees, and water, often held by governments to preserve or protect them.IPSAS 51 is effective for annual financial statements for periods beginning on or after 1 January 2028. Earlier application is permitted.

Readers are reminded that in late 2025 the IPSASB published its Work Program Consultation  with a deadline for comments of 4 May 2026. Staff recommend that IPSASB develop a general sustainability-related disclosure standard, which would leverage its private sector counterpart – the ISSB's IFRS S1 – and set out general principles for sustainability disclosures in the public sector. Read more here.

 

GRI Developments

On 20 January 2026 the Global Reporting Initiative (GRI) appointed Susanne Stormer as the Chair of the Global Sustainability Standards Board (GSSB), the GRI governance body responsible for setting the GRI Standards. Read more here. The GSSB is seeking feedback from all stakeholders interested in the social, environmental and economic impacts of organisations across all sectors and regions in order to help shape the GRI Standards. The draft GSSB Work Program 2026-2028 is available for public comment through 27 March 2026 here.

Last December, GRI released four draft revised standards on workers’ rights and protections at work, which are open for public consultation until 9 March 2026.

The GRI’s recently issued research report From Impact to Income finds 73% of 30 published studies show a positive correlation between companies that disclose their impacts and improved financial performance. The report also identifies reputational advantages from GRI reporting which translates into improved access to capital. Read more here.

 

GHG Protocol Scope 2 Consultation

On 20 February 2026 EFRAG submitted its response to the public consultation of the Greenhouse Gas Protocol on the proposed changes to Scope 2 Guidance. EFRAG has some significant reservations, in particular the fact that the consultation materials and survey are lengthy and sometimes overly complex. EFRAG recommends that future consultations are much simpler and emphasises the need to balance complexity and cost-effectiveness in relation to some changes.

 

ESMA Principles for Greenwashing Risks in Sustainable Investing

ESMA has set out four principles to address greenwashing risks in the context of sustainable investments. This is timely given a recent RepRisk data identifies Banking and Financial Services as the sector with the highest greenwashing risk by far. While the principles do not introduce new disclosure requirements, they do clarify supervisory expectations in the shape of "do’s and don’ts" for sustainability-related communications. 

 

Sustainable Finance Platform

On 21 January 2026 the Directorate-General for Financial Stability, Financial Services, and Capital Markets Union (DG FISMA) published the list of members for the third mandate of the Platform on Sustainable Finance, which will run from February 2026 until the end of 2027. During this period, the Platform will advise the Commission on the EU taxonomy and the EU sustainable finance framework at large. Read more here. 

 

SFDR Study

A new study by the National Bureau of Economic Research finds that the introduction of the SFDR neither increased capital flows into ESG funds nor materially improved the sustainability performance of investment portfolios. This seems to be down to the SFDR failing to deliver information that investors perceive as 'new' and 'understandable' rather than a lack of interest in sustainability. To make a difference information must be new, understandable, and reach its audience. Yet, a survey of 1,465 shows that SFDR information was not well understood and only 23% of end-investors had a basic awareness of the regulation. SFDR 2.0 needs a robust 'consumer strategy'.

 

New York State Approves Emissions Disclosure Law

The Securities and Exchange Commission’s (SEC) refusal to implement federal disclosure requirements for greenhouse gas emissions has prompted US states to take up the job. California was the first to do so and several other states now have laws in development. On 10 February 2026 New York State Senators voted to approve legislation requiring large companies to disclose their GHG emissions, as part of a broader policy package on climate and environmental protections. In-scope entities would be required to disclose their Scope 1 and Scope 2 emissions in 2028, based on 2027 data, and then report their Scope 3 emissions the following year. The draft law specifies that emissions must be measured and reported in line with the Greenhouse Gas Protocol corporate standards and guidance. Limited assurance on direct emissions disclosures would be mandatory from 2028 and reasonable assurance on their Scope 1 and 2 emissions would be required from 2032.

 

Guidance for Companies

Governance on sustainability is a key aspect of both European and global sustainability reporting standards and companies are at risk if they fail to give this sufficient attention. In January 2026 'Principles on Climate and Nature Governance' were published and are the subject of the latest 'Frankly Speaking' responsible business podcast – listen on Youtube, Spotify or Apple.

OECD has recently launched 'Due Diligence Checkers' - self-assessment tools to evaluate a company's current due diligence practices. The tools benchmark firms' practices against OECD due diligence standards, helping companies identify both strengths and blind spots. SAICA has also published guidance on transtion planning. Read more here. 

 

World Benchmarking Alliance (WBA)

The WBA has assessed 2,000 of the world’s most influential companies, ranking and measuring them on their impact on people and planet and presented the findings in its 2026 Benchmark Hub. 

 

Guidance on ESG Data Collection and Validation

On 19 February 2026 Position Green hosted a webinar "How to streamline ESG data collection and validation in 2026" - access the recording here and slides here.

 

ISSA 5000

Early last year the IAASB and the IESBA launched their joint effort to support effective implementation of their landmark standards aimed at advancing trust and transparency in sustainability reporting and assurance. The International Standard on Sustainability Assurance (ISSA 5000) General Requirements for Sustainability Assurance Engagements becomes effective for periods starting on or after 15 December 2026, with early adoption permitted and encouraged. ISSA 5000 is scalable and adaptable to regional regulatory requirements, can be used with any sustainability reporting framework, standard or other suitable criteria, and is applicable to all assurance providers. Translations of ISSA 5000 are available here. 

There is growing momentum around the world as jurisdictions continue to adopt ISSA 5000. Some jurisdictions are making sustainability assurance mandatory while others are taking a voluntary approach. This IAASB webpage includes ‘ISSA 5000 Jurisdictional Adoption’. 

On 21 January 2026 the IAASB and IESBA launched a joint global stakeholder survey, marking the beginning of work toward their respective Strategies and Work Plans (SWPs) for 2028–2031—a period of expected significant change in the global audit, assurance and ethics landscape. The survey includes a focus on key environmental trends shaping the future of audit, assurance, ethics, and independence, including sustainability expectations. Read more here.

 

ISSA Adoption and Implementation Support

The IAASB’s ISSA 5000 Adoption and Implementation resources continue to grow. In late 2025 the IAASB published a new set of illustrative practitioner’s assurance reports to further support the implementation of ISSA 5000.  The IAASB will continue to support the adoption and implementation of ISSA 5000, including an FAQ on materiality and updating information on jurisdictional adoption. Access published resources on the dedicated ISSA 5000 web page.

 

IESSA 

In concert with the IAASB, the IESBA launched its new International Ethics Standards for Sustainability Assurance (IESSA) and other new sustainability-related provisions establish a strong ethical foundation for sustainability reporting and assurance engagements. These standards will become effective for sustainability assurance engagements on sustainability information for periods starting on or after 15 December 2026, with early adoption encouraged. 

The IESBA continues to expand IESSA Implementation Resources. As part of the IESBA's commitment to supporting the implementation of the IESSA and the broader suite of global ethics sustainability standards, the global standards-setting board has established a feedback mechanism to gather implementation insights. This online submission form will collect insights from practitioners, firms, and other stakeholders on the application of the IESSA and related ethics standards in sustainability assurance engagements. IESBA welcomes input here. Read more about IESSA here.

On 26 February 2026 Accountancy Europe published ‘Trust and integrity: the role of corporate ecosystem actors in preventing greenwashing’. The term ‘greenwashing’ is relatively new, but the underlying conduct is not. Sustainability information is key to capital allocation and stakeholder decision-making and demand for it will persist. With lighter regulation due to the latest changes under the ‘simplification agenda’, ensuring good governance and clarifying the roles of corporate ecosystem actors is more important than ever. Deepening understanding and guidance in this area is critical.

 

European Union

While the Omnibus proposal maintains the limited assurance requirement, proposes no changes to assurance providers, and maintains the EC’s delegated power to adopt a limited assurance standard, the proposal does remove the 2026 deadline for adopting a standard and suggests deleting the possibility of moving from a requirement for limited assurance to a requirement for reasonable assurance. The EC will adopt a sustainability assurance standard by 1 July 2027. Moreover, to protect SMEs it proposes requiring assurance providers to respect the obligation that companies should not request information from value chain companies with fewer than 1,000 employees beyond what is included in the ‘Omnibus VSME’. 

Accordingly on 27 January 2026 the EC sent an updated request to the Committee of European Auditing Oversight Bodies (CEAOB), asking it to focus on developing EU-specific add-ons and possible carve-outs to ISSA 5000 for limited assurance on sustainability reporting. Carve-outs could address elements that are not applicable in, or are contradictory with, EU legal provisions, while add-ons may cover items not addressed by ISSA 5000, such as double materiality, fair presentation, EU taxonomy disclosures, and digital marking-up requirements. The EC stresses the need for assurance to remain proportionate. Technical advice is expected by 30 September 2026. Until the targeted assurance guidelines are issued assurance providers can consult the CEAOB guidelines on limited assurance on sustainability reporting. In addition, the European Contact Group (ECG) has published illustrative examples of limited assurance reports for engagements in accordance with the CSRD - see the unmodified illustrative report here and the modified illustrative report here. These may need adapting to align with specific jurisdictional requirements and standards.

 

UK Sustainability Assurance Oversight Regime

The UK Government has published its response to the consultation on developing a sustainability assurance oversight regime. The UK FRC will establish a voluntary registration regime, which will satisfy the UK Government’s standards for provision of assurance opinions for a range of sustainability related frameworks, including UK SRS, TCFD, CSRD/ESRS and other ISSB-based jurisdictional standards. The regime will focus on practitioners providing, or planning to provide, sustainability assurance to entities in the scope of UK SRS reporting requirements or similar reporting requirements in other jurisdictions, such as CSRD. Practitioners will be able to opt in to the registration regime, which will require meeting suitability criteria which are to be developed by the FRC. The register will be public. The FRC has been instructed to establish interim registration by mid-2026 and for it to be operational ahead of the 2027 financial year, when it is expected that UK listed companies will be required to report under UK SRS. In due course the Government plans to legislate to give the FRC more powers over sustainability assurance oversight.

 

18 May: Sustainability Standards Conference 2026, Frankfurt, Germany

17-20 November: World Congress of Accountants (WCOA) 2026, Seoul, South Korea 

4-5 December: Review of Accounting Studies & IASB Conference, University of British Columbia, Canada