Nicole: Hi everyone, and welcome back to Sustainability Matters. My name is Nicole Mohan, and I’m RSM’s National Sustainability Lead and a Partner in ESG and Climate Services.

Kristen: Hi, my name is Kristen Cruise and I’m a Senior Manager in ESG and Climate Services. 

In Australia, sustainability assurance is performed by a Registered Company Auditor in line with the Australian Sustainability Assurance Standard - ASSA 5000. This standard sets out how assurance over sustainability related information is planned, performed and reported. Today, we’ll walk through what sustainability assurance is, why it matters, how it works in practice, and what assurance is focused on under AASB S2 - particularly in the early years of reporting.

Nicole: Assurance matters because climate related disclosures are no longer purely informational - they are relied upon by primary users to support economic and governance decision making. Primary users this information to support: 

• Consideration of resource allocation and capital deployment decisions;
• Understanding aspects of an entity’s financial position, performance, and prospects; and
• Evaluation of the credibility and consistency of reported information.

Assurance helps build trust by ensuring that climate disclosures are supported by evidence, robust methodologies and appropriate governance.

Kristen: It also plays a key role in reducing greenwashing risk, by helping ensure that what’s being disclosed is accurate, balanced and not misleading.

With the introduction of AASB S2 and ASSA 5000, assurance is being phased in over time, starting with limited assurance over selected disclosures and progressively expanding in scope and depth, with reasonable assurance applying in later years. 

Limited assurance is a lower level of assurance where the practitioner mainly performs inquiry and analytics.  Reasonable assurance, which applies from the fourth year of climate reporting, requires much more detailed testing of sustainability information, as the assurance practitioner has to provide an opinion on the accuracy and completeness of the sustainability information.

As a result, assurance expectations are already shaping how climate disclosures are prepared.

Nicole: Assurance under ASSA 5000 goes well beyond emissions numbers. Let’s go through them now:

Governance

• Assurance considers whether governance structures are clearly defined, whether roles and responsibilities for climate‑related risks and opportunities are documented, and whether policies and procedures align with how disclosures are made.

Strategy

• This includes assessing how climate‑related risks and opportunities are identified, how materiality information is determined, and whether value‑chain impacts have been appropriately considered and mapped.

Risk Management

• Assurance focuses on whether climate‑related risks and opportunities that could reasonably affect the organisation have been identified and assessed, whether scenario analysis is supported by reliable assumptions, and whether risks are reviewed and documented on an ongoing basis.

Metrics and Targets

• This includes reviewing emissions disclosures — such as Scope 1 and Scope 2, and as Scope 3 disclosures are phased in under transition relief — as well as assessing whether targets are clearly defined, aligned to material risks and opportunities, and supported by appropriate monitoring and traceability of processes.

Across all pillars, assurance considers judgement - not just data. That includes how decisions were made, how assumptions were selected, and whether disclosures are internally consistent.

Kristen: Even for organisations not yet required to obtain assurance, expectations are changing quickly.

• Group 1 December reporters are already operating in a mandatory limited assurance environment.
• July reporters are preparing disclosures knowing assurance is imminent.
• And Group 2 entities are expected to build assurance ready foundations now, not later.

The reality is that AASB S2 disclosures are already being treated as investor grade information, regardless of timing.

Assurance is not just a compliance exercise.

It is a credibility mechanism that supports reliable, decision‑useful climate disclosures under AASB S2 - across the full scope of the standard.

If you are reporting under AASB S2, assurance should already be part of how you think about climate reporting.

Nicole: Thank you for tuning into this episode of Sustainability Matters. To find out more about sustainability assurance and climate disclosures, please contact us or your local RSM adviser. See you next time!