The European Union’s Corporate Sustainability Reporting Directive (CSRD) sets out how businesses must disclose details of their environmental, social and governance (ESG) activities in line with European Sustainability Reporting Standards (ESRS).
Irish companies categorised as large came in scope of the directive’s financial reporting rules this January, and will be expected to have appointed a sustainability assurance service provider (SASP) from January 2026 to verify the accuracy and completeness of these reports. (See the AB article ‘Sustainability reporting gathers pace’ for more background.)
‘With sustainability reports the items are both quantitative and qualitative’
The new SASP licence accredits sustainable accounting and audit services in line with CSRD requirements, and has the potential to open up new opportunities for Irish accountancy firms looking to expand the range of their offer and attract new clients.
First off the blocks
As a Recognised Accountancy Body, ACCA is able to authorise SASPs in Ireland – and recently issued its very first licence here to Baker Tilly Ireland. Brendan Kean, audit and assurance partner at Baker Tilly Ireland, says the firm believes that the move reflects its carefully considered investment in ESG expertise. ‘We’ve been working on this for six months, even though we already had an ESG department and have invested heavily in the space,’ he says
‘The training time requirement is substantial’
In terms of attracting new business, Kean says that Baker Tilly has already received a large number of enquiries from companies seeking assistance, with the vast majority of them having business interests around the world.
Commit resources
Under the new directive, accountancy firms of any size qualifying as an SASP could potentially provide assurance for much larger businesses, opening the way for smaller firms to forge a connection with companies who may not have previously used their services.
However, in Kean’s view, the ability to invest sufficient resources is likely to be a decisive factor for potential entrants. ‘The training time requirement is substantial; you’re certainly going to have to invest heavily to get into the space. Because the legislation is so new we designed and tailored our own CPD.’
The broad range of ESG issues to be captured in reports also brings specific challenges, even for the most experienced auditors. ‘It’s a very different skillset,’ says Kean. ‘It’s easier to audit a number than to audit a sustainability statement because with sustainability reports the items are both quantitative and qualitative. Assuring qualitative items can be much more difficult.’
‘The SASP has to hold companies to account for what they are promising’
New SASPs must also be on the lookout for so-called ‘greenwashing’, where a company might be making misleading statements that highlight the supposed sustainability features of its products or services in a bid to boost environmental credentials.
Kean believes that this will be one of the most challenging aspects of ESG assurance. ‘We’re attaching a limited assurance opinion to the statement,’ he says. ‘We need to be very clear that there is no greenwashing; that’s what the EU directive is trying to stop. We do know that plenty of companies are greenwashing and that we need to address that as an issue.
‘The SASP has to hold companies to account for what they are promising, compare it to what they are delivering and measure it year on year through the sustainability report.’
Reputational benefits
Although arising from an EU directive, the changes to corporate sustainability reporting will, Kean predicts, play a role in moving Ireland towards its own sustainability goals. ‘Ireland has gone with a gold-plated approach, whereas some jurisdictions haven’t transposed it yet so it’s probably a step ahead of most other jurisdictions in the EU,’ he says. ‘Many of the potential clients we’re talking to certainly appreciate that.
‘We have a reputational advantage in Ireland and that will benefit companies’
‘A lot of multinationals are headquartered out of Ireland and there’s a benefit to these businesses when they have a strong regulatory background around sustainability. It can help them with their key stakeholders, whether that be banks, shareholders or employees. These are all looking at companies and asking, “Are you at the forefront on sustainability?”
‘Ireland has a reputational advantage purely because we’re a step ahead in CSRD transposition and that will benefit companies which are reporting under this directive. We’ll be seen as “that country that does it right”.’
Thanks to the new reporting regime, banks, customers and employees will also have more insight in future when it comes to lending, buying or accepting a job offer. Meanwhile, as Kean points out, environmental organisations and lobbyists are likely to go through reports with a fine-tooth comb, calling out any inconsistencies.
He believes employees will be particularly interested in the progress companies make towards their sustainability goals. ‘While pay is important for staff, they are starting to look more and more at these issues, thinking about the future and what it holds for them.
‘If a company can show what they’re actually doing about it in their sustainability report – and that report is now assured – then they know it’s not just greenwashing.’
More information
Sustainability guidance is available at ACCA’s sustainability reporting hub
Find out about ACCA’s Certificate in Sustainability for Finance
