In collaboration with the Responsible Investment Association Australasia (RIAA), Chartered Accountants Australia and New Zealand (CA ANZ) has published a new guide to assurance for investors. This guide aims to help investors, as primary users, understand the assurance requirements linked to Australia’s mandatory climate-related financial disclosure regime.

Why assurance matters

Independent external assurance, such as audits, plays a vital role in building trust. It gives investors greater confidence in the reliability and accuracy of sustainability information. Understanding the differences between levels of assurance – and what modified opinions or conclusions mean – helps investors make informed decisions.

Responsibilities for reporting entities

Entities must take a proactive approach to assurance. This means engaging with auditors early, ensuring robust internal controls, and maintaining clear documentation to support the assurance process. Early engagement helps identify and address any gaps in processes or controls before reporting deadlines.

Levels of assurance and types of opinion/conclusion

There are two main levels of assurance:

• Reasonable  assurance provides a higher level of confidence, though not absolute.
• Limited assurance offers lower confidence and a narrower scope.

The type of assurance opinion or conclusion – unmodified or modified (i.e. qualified, adverse or disclaimer) – directly affects how much investors can rely on the reported information. In the early years of mandatory climate-related disclosures, investors should expect more modified opinions/conclusions. This is due to less mature internal controls and the greater use of estimates in disclosures.

What investors should do

Investors are encouraged to:

• Understand  the assurance process and its implications
• Engage early with reporting entities to clarify assurance approaches
• Pay close attention to the nature of assurance opinions and any accompanying notes

These steps will help investors assess and manage long-term risks and opportunities as the climate-related disclosure landscape evolves.