AccountancyEurope: CSRD readiness: limited assurance approach to transition plans

11 December 2024

In this series of 3 papers, we share some key aspects on the assurance practitioner’s approach to double materiality assessment, value chain information and transition plans to contribute to the CSRD implementation and readiness debate.

Briefing papers: 

Transition plans

Double materiality

Value chain information

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The Corporate Sustainability Reporting Directive (CSRD) requires companies to draw up sustainability reports in accordance with the European Sustainability Reporting Standards (ESRS). According to the CSRD, these reports will also be subject to assurance. The first sustainability reporting and assurance reports will be published in 2025 on 2024 data.

Professional assurance standards such as the International Standard on Sustainability Assurance (ISSA 5000) and CEAOB guidelines outline principles for sustainability reporting assurance engagements. The European Commission will adopt an EU limited assurance standard to define expectations for practitioners conducting limited assurance engagements in the EU on the basis of CEAOB technical advice including adds-on and possible carve-outs to ISSA 5000 (see EC letter to CEAOB).

In this series of 3 papers, we share some key aspects on the assurance practitioner’s approach to double materiality assessment, value chain information and transition plans to contribute to the CSRD implementation and readiness debate.

These three short papers are meant to provide a high-level explanation of the limited assurance approach rather than a detailed roadmap of procedures. They are primarily addressed to stakeholders such as users of assurance and structured in three parts:

• facts and principles from the CSRD, ESRS and Corporate Sustainability Due Diligence Directive (CSDDD) including those that are key to the assurance engagement
• high-level explanation to limited assurance approach along with examples
• preparer’s perspectives on transition plans

Transition plans

Facts and principles – CSRD/ESRS/CSDDD

Climate change disclosures are subject to double materiality assessment. If material, as per the ESRS E1, companies shall disclose their climate change mitigation transition plan and actions, including[1]:

• an explanation of how the undertaking’s targets align with limiting global warming to 1.5°C as per the Paris Agreement
• an explanation of identified decarbonisation levers and key planned actions
• an explanation and quantification of the company’s investments and funding supporting the transition plan, with reference to KPIs of taxonomy aligned CapEx and CapEx plans where relevant
• a qualitative assessment of the potential locked-in GHG emissions from key assets and products
• an explanation of how the transition plan is embedded and aligned with strategy and financial planning
• confirmation of approval by administrative management and supervisory bodies
• explanation of the plan’s implementation progress.

If the undertaking does not have a transition plan in place, it shall indicate whether, and, if so, when it will adopt one....

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