Letter to IAASB on the Proposed Sustainability Assurance

Dear Mr. Seidenstein:

The American Bankers Association (ABA) appreciates the opportunity to comment on the IAASB's Proposed International Standard on Sustainability Assurance (ISSA) 5000: General Requirements for Sustainability Assurance Engagements (Proposed ISSA). The Proposed ISSA responds to stakeholders worldwide who are interested in sustainability reporting and recognize the importance of assurance thereon. ABA members consist of lenders, investment bankers, asset managers, investment analysts and asset custodians and, consequently, bring perspectives from both the users of the information as well as the preparers. As our members also participate in highly-regulated activities, their viewpoints will often be responsive to regulatory agency needs. Therefore, our perspectives reflect a wide range of stakeholders.

ABA supports efforts to develop an overarching auditing and assurance standard that addresses sustainability matters and our comments below are meant to address some of the specific questions posed in the stakeholder survey. Practically speaking, auditing and assurance standards will highly influence the governance and internal control systems that reporting companies will be expected to implement. Such standards will also influence how users of sustainability information will use it in light of assurance-related assessments. With those things in mind, while we believe the Proposed ISSA reflects thoughtful deliberation, we believe the Proposed ISSA may not ultimately be responsive to the larger public interest. As a result, confusion may develop over the resulting governance and internal control frameworks needed by preparers, over the extent of testing and related costs to provide assurance, and over how users will interpret any assurance attestations. Further, given the well-known industry-wide manpower shortage, reconsideration may be required of the effective dates of both the final standard and those of new sustainability reporting regimes.

This is primarily the result of the nascent state of sustainability reporting, characterized by limited knowledge of and experience with internal controls by many stakeholders and little accountability as to the accuracy of currently reported amounts. Of course, such accountability will change as reporting requirements, accompanied by assurance requirements, become effective over the next few years. With this in mind, ABA urges the IAASB to take a leading role in educating stakeholders as to the many demands of the assurance process, including the related costs and internal controls that will likely be needed by reporting companies.

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