Limited Assurance and Reasonable Assurance in ESG/Sustainability Reporting?

1. What Is “Assurance” in ESG/Sustainability Reporting?

Assurance provides external verification of non‑financial (ESG) data — confirming that the information in a sustainability or climate report is reliable, consistent, and prepared in accordance with recognized standards such as:

• ISAE 3000 (Revised) – International Standard on Assurance Engagements

• AA1000 AS v3 – AccountAbility Assurance Standard

• CSRD / ESRS (EU) – which will mandate limited or reasonable assurance levels.

⚖️ 2. Levels of Assurance

Assurance Type	Meaning	Evidence Depth & Procedures	Level of Confidence Provided
Limited Assurance	Auditor provides negative assurance: “Nothing has come to our attention that indicates material misstatement.”	Fewer tests; mainly high‑level reviews, interviews, analytical procedures, limited sample checks.	Moderate confidence(≈ limited reliability).
Reasonable Assurance	Auditor provides positive assurance: “In our opinion, the subject matter is free from material misstatement.”	More extensive: onsite reviews, control testing, re‑performance of calculations, traceability to source data.	High confidence(close to financial audit assurance).

🧩 3. Key Differences

Aspect	Limited Assurance	Reasonable Assurance
Objective	Detect material misstatements through a review process.	Provide positive confirmation after comprehensive testing.
Scope of Work	Narrower; limited verification of selected indicators or statements.	Broader; covers more data points, systems, and controls.
Testing Effort	Light analytical procedures, management inquiry.	Detailed testing, site visits, third‑party verification, control walkthroughs.
Evidence Gathering	Based mainly on discussions and analytical reviews.	Based on re‑performance, sampling, recalculations, document tracing.
Reporting Language	“Nothing has come to our attention…”	“In our opinion…”
Cost & Effort	Lower (common for voluntary sustainability reporting).	Higher (common when ESG data is integrated with financial reporting).
Common Use Cases	GRI, CDP, initial ESG disclosures.	CSRD/ESRS future compliance, integrated or investor‑grade reports.

4. Example of the Statements:

• Limited Assurance Statement:

  "Based on our review, nothing has come to our attention that causes us to believe that the greenhouse gas emissions disclosures are not prepared, in all material respects, in accordance with the GRI Standards."

• Reasonable Assurance Statement:

  "In our opinion, the greenhouse gas emissions disclosures present fairly, in all material respects, the company’s performance in accordance with the GRI Standards."

  
  

🌍 5. Real‑World Context (2025 Trend)

• Most current ESG disclosures still use limited assurance (≈ 80% of large firms).

• Under EU CSRD / ESRS, companies must move from limited to reasonable assurance by the early 2030s.

• The IAASB (International Auditing and Assurance Standards Board) is developing a new ISSA 5000 standard to unify assurance practices for sustainability data.

  
  
  
  

✅ Summary Table

Category	Limited Assurance	Reasonable Assurance
Confidence Level	Moderate	High
Auditor Conclusion	Negative form	Positive form
Testing Depth	Analytical / inquiry	Substantive & control testing
Cost & Time	Lower	Higher
Common Users	Voluntary reporters, early ESG reporters	Regulated / investor‑grade reporters
Example Standard	ISAE 3000 (Review)	ISAE 3000 (Audit)

In short:Limited assurance = a review → “nothing wrong found.”Reasonable assurance = an audit → “confirmed accurate.”

#assurance

#audit

#esg

#sustainability

#reliability

#ISAE