Financial Reporting Council Issues Standard to Build Confidence in Sustainability Disclosures

Key Takeaways

• New UK Standard: The Financial Reporting Council (FRC) has issued ISSA (UK) 5000, establishing a consistent, globally aligned framework for sustainability assurance.
• Global Alignment: The UK version mirrors the IAASB’s international benchmark, covering both limited and reasonable assurance engagements.
• Voluntary Rollout: The standard is available for early adoption and becomes effective for periods beginning on or after December 15, 2026.
• Investor Confidence: By enhancing the credibility of sustainability information, the standard aims to support more informed investment decisions and strengthen the UK’s sustainable finance reputation.

Deep Dive

The UK’s Financial Reporting Council (FRC) has issued a new sustainability assurance standard, International Standard on Sustainability Assurance (UK) 5000 or ISSA (UK) 5000, marking a significant milestone in the country’s push for more credible, high-quality sustainability reporting.

The standard, published on November 12, 2025, provides a globally aligned framework for how assurance providers evaluate companies’ sustainability information, from climate disclosures and labor practices to biodiversity and other environmental or social topics. Though voluntary for now, ISSA (UK) 5000 is designed to bring the UK in line with the International Auditing and Assurance Standards Board’s (IAASB) benchmark standard, ensuring companies and investors are speaking the same language when it comes to sustainability data.

FRC Executive Director of Regulatory Standards Mark Babington called the release “a significant step in establishing a consistent framework for sustainability assurance in the UK,” adding that it will “help UK companies access capital more efficiently and contribute to long-term economic growth.”

Aligning Assurance With a Global Baseline

The new standard applies to both limited and reasonable assurance engagements—meaning it covers everything from light-touch verification to deeper, audit-style reviews. It’s also profession-agnostic, enabling sustainability assurance to be carried out by qualified practitioners beyond the accounting profession.

In practical terms, ISSA (UK) 5000 requires assurance providers to determine whether the criteria used by an organization to prepare its sustainability disclosures are appropriate and robust. It also sets out expectations for evaluating how companies identify what to report, apply materiality, and define reporting boundaries—all important steps to ensuring that sustainability information is meaningful, not marketing.

The standard dovetails with existing ethical and quality management frameworks, such as the IESBA Code of Ethics and ISQM (UK) 1, to reinforce independence and consistency across assurance engagements. It’s effective for periods beginning on or after December 15, 2026, though firms are free to adopt it earlier.

Strengthening Credibility and Investor Confidence

While sustainability reporting has rapidly expanded in the UK, the credibility of those disclosures often depends on how rigorously they’re verified. By aligning with the global benchmark, ISSA (UK) 5000 aims to strengthen investor trust and streamline assurance across borders, an increasingly important goal as ESG reporting standards proliferate.

The FRC said the standard received “strong support” from firms, professional bodies, investors, and companies during consultation, with broad agreement that a voluntary rollout would give assurance providers time to adapt before potential future mandates.

In essence, the move signals the FRC’s intent to raise the bar for sustainability assurance while giving the market room to mature. It also reinforces the UK’s ambition to remain a hub for sustainable finance, one where investors can rely on consistent, high-quality data to inform decisions.

What It Means for GRC and Assurance Professionals

ISSA (UK) 5000 provides a new reference point for integrating sustainability into the broader assurance ecosystem. Internal audit teams will need to consider how their existing frameworks align with the FRC’s new requirements, while boards and audit committees will likely see a stronger emphasis on verifying sustainability information with the same discipline once reserved for financial reporting.

The introduction of the standard also hints at a gradual move toward mandatory assurance over sustainability disclosures as investor expectations, and regulatory oversight, continue to grow.

Sustainability assurance is quickly becoming the next frontier of corporate accountability. The FRC’s adoption of ISSA (UK) 5000 not only builds trust in UK-issued sustainability reports but also lays the groundwork for a more integrated approach to governance, risk, and reporting.

For companies preparing for the next wave of assurance expectations, treat sustainability information with the same rigor as financial information. The market, and the regulators, are heading that way.

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