The Institute of Chartered Accountants of India (ICAI) has announced the finalization of its new Standard on Sustainability Assurance (SSA 5000). This significant development aims to provide clear guidelines for assurance professionals assessing sustainability and Environmental, Social, and Governance (ESG) disclosures made by companies across India.
The SSA 5000 standards are slated to come into effect from April 1, 2027. Their introduction is expected to bring greater rigor and consistency to ESG reporting, particularly for the top 1,000 listed companies by market capitalization, for whom sustainability reporting is already mandatory under SEBI guidelines. The framework also allows for voluntary compliance by other entities.
Boosting Credibility and Transparency in ESG Reporting
According to Prasanna Kumar D, President of ICAI, this move represents a crucial step in sustainability assurance. He highlighted that, until now, a standardized format for assurance was lacking, despite mandatory sustainability reporting for many companies. The new standards establish a principle-based framework designed to ensure a comprehensive and consistent approach nationwide.
Pramod Jain, Chairman of the Sustainability Reporting Standards Board of ICAI, emphasized that the SSA 5000 framework is specifically designed to strengthen the overall credibility and improve the transparency of ESG reporting. This will be vital for companies seeking to attract investments and maintain competitiveness in a global market increasingly focused on sustainable practices.
Collaboration with SEBI and Future Initiatives
The development of these standards involved close discussions with the Securities and Exchange Board of India (SEBI) and received recent approval from the ICAI Central Council. SEBI's existing mandates require the top 1,000 listed companies to publish sustainability data using the Business Responsibility and Sustainability Reporting (BRSR) framework.
The growing demand for robust ESG disclosures has created a parallel need for qualified sustainability assurance professionals. Recognizing this, the ICAI had previously issued a draft exposure on SSA 5000 in June, based on international norms. Furthermore, the institute is actively developing a guidance note to assist companies in preparing their BRSR reports and has already launched certificate courses for its members on the BRSR framework, demonstrating its commitment to building capacity in this critical area.