Trust Arrives on Foot: The Quiet Work Behind Sustainability's Credibility Problem
There is an old Dutch proverb: Trust arrives on foot and leaves on horseback. Volkswagen learned this the hard way with its emissions scandal1. So did DWS, the German asset manager that paid US regulators US$19 million to settle charges relating to misstatements about its ESG investment process2. Vanguard Australia had to pay AU$12.9 million penalty for misleading investors about the ESG screening applied to one of its investment funds3. None of these episodes was about the absence of sustainability information. They were about its credibility.
The distinction - between having sustainability information and the ability to believe it - is the real story of the current moment and it is easy to miss this for two reasons.
The first is that the headline numbers point the other way. In 2024, almost 12,900 companies, representing 91 percent of global- listed market capitalisation, disclosed sustainability-related information, up from 9,600 companies and 86 percent of capitalisation in 20224. Trust has not grown at the same pace. Transparency without credibility has limited value.
The second is that the discourse itself has been lopsided. Almost all of the public conversation on sustainability disclosure has been about the need for it; why companies should report, what they should report and how much. Comparatively little has been said about the harder question: how anyone is meant to believe what gets reported? The two problems are not the same and solving the first does not solve the second.
Three Boards, One Architecture
The response so far has come from three international standard-setting bodies, each addressing a different part of the same problem. The International Sustainability Standards Board (ISSB) tackled the foundational question of what companies should disclose in the first place - launched at COP26 and moving with urgency: IFRS S1 and S2 were issued within two years of the board's creation and an early endorsement from IOSCO gave regulators everywhere a ready reason to build the standards into their own frameworks.
More than 40 jurisdictions5 have since adopted, incorporated or are in the process of implementing ISSB standards. However, this headline number understates the work still ahead on depth and consistency of adoption; a jurisdiction "taking steps" and a jurisdiction requiring assured, decision-useful disclosure sit at different points on the same journey.
Alongside that work, and drawing rather less public attention, two Boards have been building the machinery needed to make disclosure trustworthy once it exists. The International Auditing and Assurance Standards Board (IAASB) issued the International Standard on Sustainability Assurance (ISSA) 5000. The International Ethics Standards Board for Accountants (IESBA) issued the Global Ethics Standard for Sustainability, comprising the International Ethics Standards for Sustainability Assurance, including International Independence Standards (IESSA), together with updates to Code addressing sustainability reporting and a standard on the use of external experts. Both IAASB and IESBA new provisions take effect in December 2026, and both are framework-neutral, that is, they can be applied to sustainability information prepared under different frameworks. IOSCO has issued statements supporting the issuance of both these standards.
Between them, ISSB, IAASB and IESBA now form a powerful trinity of standards: one board decided what companies should disclose; the other two built the standards that decide whether any of it can be believed.
The Ethics Behind the Assurance
The role of assurance is to build confidence in sustainability information through independent scrutiny. Sustainability engagements are subject to the same behavioural frailties as financial-statement audits - conflicts of interest, management pressure, inducements, the temptations created by new technology. A core design choice behind the IESSA, sitting in a new Part 5 of the Code, is therefore equivalence: sustainability assurance should command the same level of public trust as financial-statement audit. Similarly, well-established independence considerations relating to financial interests, business relationships, fees, long association and the provision of non-assurance services remain equally relevant.
Unique challenges
Sustainability information also presents distinctive challenges that require additional safeguards. Much of it blends historical data with estimates, scientific models and forward-looking commitments - transition plans, scenario analyses, net-zero pathways - whose very nature creates scope for optimism, selective assumptions and management bias. Practitioners must be willing to challenge assumptions, remain alert to pressure to endorse a preferred narrative and communicate limitations or uncertainty clearly.
Sustainability information also frequently extends beyond the reporting entity itself, in emissions and labour practices reported by suppliers the entity does not control, and requires expertise - in emissions measurement, climate science, biodiversity - that no single assurance practitioner can be expected to hold.
The IESSA addresses the value chain challenge by providing a framework for evaluating other assurance providers' independence. The standard on external experts addresses the multi-disciplinary challenge by setting out how to assess the competence and objectivity of external experts. The standards also build in scalability and proportionality, with differentiated provisions for public-interest entities compared with other entities.
Where the Real Change Happens
The IESBA’s ethical requirements are not confined to the assurance practitioners. They reach back to the reporting entity, into how the information is prepared in the first place, and that is what sets these standards apart from a purely technical compliance exercise.
Beyond the rulebook, what the IESBA’s standards are really attempting is a change in conduct and culture at the point where sustainability numbers and narratives are actually constructed - cultivating behaviour among preparers and assurance providers alike that is more aware and more mindful of the judgements being made. That is not a modest ambition.
Adopted and implemented well, ISSA 5000 and the IESSA and the IESBA’s reporting requirements can function as a real antidote to misinformation and greenwashing, and to something subtler still: "purpose-washing," the dressing up of ordinary conduct as mission.
IESBA has prioritised the promotion of IESSA's adoption and implementation and has established Board-level working and advisory groups towards this objective.
Headwinds
All of this is arriving at a moment when the political tide has turned against it in places. Legislative support for sustainability action has weakened in several major markets - wars, energy-security anxieties, and a broader shift in the political centres of gravity have slowed mandates and rolled some back outright.
What is striking is what has not happened: responsible corporates have not abandoned climate investment and responsible investors have not stopped demanding disclosure. They have simply started flying lower - quieter language, less overt positioning, the same substance without the fanfare. A 2025 EcoVadis survey6 of U.S. executives found that most companies had maintained or increased sustainability investment even as many pulled back on talking about it publicly, a pattern now commonly described as "greenhushing". Momentum has not disappeared. It has gone underground. Quiet commitments still need to be trustworthy ones.
A single global baseline may, in fact, be a harder ask in this climate than it was when ISSB launched in 2021. Convergence - letting local realities shape implementation while keeping sight of a shared long-term goal - is a more realistic bridge to that ideal than insisting on immediate uniformity, and possibly a more durable one.
Sequencing the Journey: Lessons from India
A phased approach, supported by capacity building, can help regulators align implementation with the maturity and capabilities of their respective markets. SEBI's experience with the Business Responsibility and Sustainability Report (BRSR) offers a useful example. While developing the BRSR, a benchmarking exercise was undertaken with the international disclosure frameworks available at the time, resulting in a number of common elements. Reporting requirements for the top 1,000 listed entities by market capitalisation came first; assurance requirements followed only later, and only for a defined set of BRSR Core metrics, under a phased roadmap.
Stock exchanges also have an important role to play. As gatekeepers of public markets, they can promote consistent disclosures, support capacity-building and facilitate dialogue among issuers, investors and assurance providers - helping strengthen both the credibility of sustainability information and confidence in markets.
The Road Ahead
Like Homer's Odyssey, the journey ahead looks long and will not be without obstacles. The sustainability reporting and assurance ecosystem is still being built. New technologies, artificial intelligence and emerging sustainability-related metrics will create fresh opportunities, as well as new ethical challenges. The direction of travel is, however, clear.
Political headwinds in parts of the world, including relaxation of regulatory mandates, do not remove the underlying reality: sustainability risks are business risks. Extreme weather events, supply-chain disruptions, biodiversity loss, resource scarcity and changing societal expectations continue to affect business models and enterprise value. Investors need reliable information about those risks to make informed investment and capital-allocation decisions.
ISSB, IAASB and IESBA have, together, spent the past few years building the architecture. What they now need, from various stakeholders including regulators, exchanges, multilateral institutions and the broader market, is sustained institutional and financial support to see that architecture through adoption and implementation.
The future of sustainability reporting will depend not only on what companies say, but on whether markets believe them.
The Author is Whole-Time Member at SEBI and Member on the Board of IESBA. The views expressed in this article are personal.
2 https://www.sec.gov/newsroom/press-releases/2023-194
4 OECD (2025), Global Corporate Sustainability Report 2025, OECD Publishing, Paris, https://doi.org/10.1787/bc25ce1e-en.
6 https://resources.ecovadis.com/whitepapers/the-2025-us-business-sustainability-landscape-outlook
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