FRC Opens Consultation on Proposed UK Sustainability Assurance Standard

Key Takeaways

• Voluntary Framework: The FRC is consulting on ISSA (UK) 5000, a voluntary standard for sustainability assurance engagements in the UK, aligned with international frameworks.
• Global Alignment: The proposal aims to align with global standards, reducing complexity for firms working across different jurisdictions and ensuring consistent, quality sustainability assurance.
• Feedback Sought: The FRC is seeking public feedback on the standard, including suggestions for modifications, additional UK-specific adaptations, and the proposed effective date.
• Effective Date: The proposed effective date for the UK standard is 15 December 2026, with early adoption allowed.

Deep Dive

The Financial Reporting Council (FRC) is opening the door for UK stakeholders to shape the future of sustainability assurance. In a recent move to bring the UK into closer alignment with global practices, the FRC has launched a consultation on a proposed version of the International Standard on Sustainability Assurance (ISSA) 5000. The consultation aims to gather feedback on the introduction of ISSA (UK) 5000, a voluntary framework designed to bring consistency and transparency to sustainability assurance in the UK market.

The FRC’s latest proposal, set for voluntary use, aims to standardize how assurance engagements related to sustainability reporting are handled. It’s a move that recognizes the growing importance of sustainability disclosures, not just for businesses and regulators, but for investors who need reliable, decision-useful information.

By aligning the UK with the international ISSA 5000, the FRC hopes to simplify processes for firms working across multiple jurisdictions. And it’s not just accountants who can use this standard; other assurance practitioners can also apply it, provided they meet the necessary ethical and quality management requirements. In short, it’s an inclusive, global approach that reduces unnecessary complexity in an increasingly interconnected world.

Mark Babington, Executive Director of Regulatory Standards at the FRC, put it succinctly: "As sustainability assurance matures, it is important that the UK establishes a consistent sustainability assurance framework which underpins investor confidence in UK sustainability reporting. The proposed adoption of this Standard demonstrates the FRC's continued commitment to internationally consistent audit and assurance frameworks, while allowing flexibility through voluntary use.”

What’s in it for the UK?

The FRC’s consultation isn’t just about ticking boxes—it’s a carefully considered move to make sustainability reporting in the UK more robust and credible. As companies face growing pressure to disclose sustainability-related risks and opportunities, the standard promises to build confidence in the information they provide. With greater transparency, UK companies may find themselves in a stronger position to attract capital, fueling long-term growth.

The FRC is also quick to point out that this isn’t a push for mandatory use. Instead, the aim is to provide a consistent, flexible tool that companies can adopt at their own pace. But this doesn’t mean the consultation is without impact. The FRC is looking for feedback on how the UK version might be refined to meet the unique needs of the local market.

Here’s what the FRC is proposing in a nutshell:

• ISSA (UK) 5000 would be used voluntarily by assurance providers across the UK, helping them ensure consistent and high-quality sustainability assurance engagements.
• The standard will align with international frameworks like the IFRS Sustainability Disclosure Standards (S1 and S2), and will apply to both limited and reasonable assurance engagements.
• The FRC has proposed one key modification: a safeguard that prohibits internal auditors from directly assisting in sustainability assurance engagements. This is in line with existing UK rules for financial audits.
• The effective date for these engagements would be for periods starting on or after 15 December 2026, with early adoption allowed.

Why Now?

Sustainability is no longer just a buzzword; it’s become an integral part of business strategy. With this proposal, the FRC is aiming to provide clarity and structure for businesses navigating sustainability reporting. If adopted, ISSA (UK) 5000 would help companies create more trustworthy sustainability disclosures—important not only for transparency but for building long-term investor confidence.

While the FRC's proposal is open for public comment until 31 July 2025, they’re particularly interested in feedback on several key points:

1. Do you think ISSA (UK) 5000 should be introduced for voluntary use in the UK?
2. What do you think of the proposed modification prohibiting internal auditors from assisting in sustainability assurance engagements?
3. Are there other adaptations that should be considered for the UK context?
4. Does the proposed effective date of 15 December 2026 work for you?

Ultimately, this consultation is part of a broader movement towards making sustainability assurance as dependable and universally accepted as financial audits. By aligning with international standards, the FRC is helping to ensure that UK companies remain competitive on the global stage while upholding the integrity and transparency needed for sustainable growth.

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