CSRD Directive: The CEAOB has prepared draft guidelines on limited assurance engagements in respect of sustainability reporting

Assurance for sustainability reporting is one of the new requirements introduced by the CSRD Directive with a view to ensuring the quality and reliability of sustainability information reported to the market. To harmonize assurance engagements, the CSRD Directive envisages the adoption of limited assurance standards by the European Commission - by means of a delegated act - by October 1, 2026 at the latest.

Given, however, that limited assurance is already required for the sustainability disclosures for 2024 to be reported by large public-interest corporations previously subject to the non-financial reporting directive, the publication of the CSRD Directive has raised the question of which rules or standards should be followed in the meantime in the performance of these engagements.

The Directive envisages the possibility, throughout this transitional period, of the Member States being able to apply national assurance standards, procedures or requirements, and communicating them to the European Commission before their entry into force. Furthermore, in order to facilitate the harmonization of assurance practices during this period, Whereas clause 69 encourages CEAOB to adopt non-binding guidelines setting out the procedures to be followed by assurance providers when issuing their reports, pending the adoption by the Commission of the standards referred to.

CEAOB, at the request of the European Commission, has done just that, drafting non-binding guidelines for limited assurance engagements in respect of sustainability disclosures, and such guidelines have just been submitted for public consultation, through to July 22, 2024.

Although the draft stresses that these guidelines do not constitute standards, are not intended to be exhaustive, and should be read in conjunction with whatever national rules may be applicable, they address some aspects of particular interest, such as, among others, the procedures to be performed to understand and assess how the entity has determined eligible and ineligible activities in accordance with article 8 of the Taxonomy Regulation, the systems implemented to obtain information on the value chain and the reliability thereof, or the format and content of the limited assurance report itself.

The definitive wording of the guidelines will only be known when they are adopted. In any event, the mere fact that the different national supervisory bodies which make up CEAOB have liaised to produce these guidelines is a remarkable milestone in the path towards ensuring, through assurance, the comparability, reliability and quality of sustainability reporting.