IESBA proposes draft ethics code to address greenwashing

The International Ethics Standards Board for Accountants (IESBA) has launched a consultation on two new frameworks of behaviour in companies on how to gain better trust in publicly communicated sustainability information.

The standards aim to mitigate greenwashing and elevate the quality of sustainability information, as well as provide an ethical framework to guide firms that assess ESG and sustainability claims made by companies.

The IESBA has invited comments from accountants, sustainability practitioners, regulators, and investors on its two proposed frameworks: International Ethics Standards for Sustainability Assurance and Using the Work of an External Expert.

Both drafts were coordinated alongside the International Auditing and Assurance Standards Board (IAASB).

The proposed ethics standards are especially relevant where sustainability information is increasingly important for capital markets, consumers, corporations and their employees, as well as for governments and society at large.

The launch of the consultations comes after European lawmakers approved rules designed to drive major crackdowns on misleading or unsubstantiated environmental claims.

To coincide with the launch, the International Accreditation Forum (IAF) announced that it intends to stipulate that national accreditation bodies around the world use the IESBA’s International Ethics Standards for Sustainability Assurance framework when accrediting and authorising conformity assessment bodies to carry out assurance work on corporate sustainability disclosures.

Development of the standards involved four global roundtables which included the input of over 140 senior-level representatives from stakeholders from different jurisdictions and backgrounds.

Gabriela Figueiredo Dias, chair of the IESBA, said: “Ethics is about acceptable behaviours and right decisions to avoid bias in sustainability information and foster trust.

”From investors looking for transparent and credible information, to consumers wanting to ensure the reliability of companies’ narratives about the sustainable credentials of their products and practices, and companies wanting to be trusted, all users of sustainability disclosures have a vested interest in ensuring ethical choices by the preparers and assurers of such information.”

She added: “These proposed standards will serve as a cornerstone of ethical behaviour with far-reaching benefit.”

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