Sustainability report assurance – general principles

The Corporate Sustainability Reporting Directive (CSRD), which came into effect on 5 January 2023, sets out the principles for preparing sustainability reports (sustainable-development reports, ESG reports – these terms are used interchangeably) and introduces the requirement for assurance of such reports. In Poland, certified auditors will be responsible for providing this assurance.

Implementing the CSRD into Polish law
The directive will be implemented into Polish law primarily through amendments to the Accounting Act (Journal of Laws 2023, items 120, 295, and 1598, and 2024, item 619), with the addition of a new Chapter 6c, entitled Sustainability Reporting. However, given that responsibility for assurance of reports will rest with certified auditors, the Act on Certified Auditors, Audit Firms, and Public Oversight (Journal of Laws 2024, item 1035) will also be amended.

The changes to the Act will address several issues. Initially, relevant terms concerning sustainability reporting and report assurance will be introduced. Subsequently, provisions regarding the certified auditor’s authority to conduct assurance of reports will be added. According to the proposed regulations, certified auditors authorised to perform report assurance will be required to pass an exam in sustainability reporting and complete an eight-month internship in this area. The auditor must also be registered in a special register, with a notation indicating that they are authorised to provide assurance on sustainability reporting.

As the new provisions enter into force, all certified auditors already registered before 1 January 2024 will be eligible to conduct audits of reports without the need to pass additional exams or complete an internship. They will only be required to participate in mandatory professional training to enhance their qualifications and update their knowledge and skills. The National Chamber of Certified Auditors will determine the scope and number of training hours. These provisions will also apply to individuals who begin the qualification process before 1 January 2024 and are registered before 1 January 2026. An additional exam and internship will be required for those who begin the qualification process after 1 January 2026.

New regulations regarding the assurance of sustainability reporting
In light of the above, changes will be required, including adjustments to the regulations concerning the final exam and the composition of the Examination Committee. The Committee must include at least two individuals authorised to assure sustainability reporting.

The scope of information in the register maintained by PIBR, the Polish chamber of certified auditors will also change. Going forward, the register will include information on whether a certified auditor is authorised to perform sustainability report assurance. Additionally, a similar obligation will apply to audit firms, which will be required to update information about whether the auditors employed by or collaborating with the firm have the necessary qualifications.

The Act will also specify requirements for audit firms conducting assurance, including the appointment of at least one key certified auditor, ensuring appropriate resources necessary for the process, and the obligation for the key certified auditor to be involved throughout the entire process. According to the legislation, using subcontractors or external experts, such as those specialising in climate-related issues will be permissible. In such cases, it will be necessary to clearly specify the tasks carried out by the external entities.

Furthermore, a new provision will require that all documentation be prepared in Polish and subject to review, including the methodology used during the assurance process. The person conducting the review (the reviewer) must have knowledge in sustainability reporting. It has been outlined that such actions will aim to eliminate irregularities, which are expected to be ad hoc in nature.

Sustainability reporting assurance – new regulations, standards, and sanctions for auditors
According to the draft regulations, audit firms will be required to close the audit and assurance files no later than 60 days after the audit report’s preparation date and to retain the documents for at least eight years from the date of closure.

The provisions of the Act will also allow for cooperation with foreign supervisory authorities. In such cases, the audit firm will be required to present an appropriate document issued by the authority of an EU member state or a third country, certifying the firm’s ability to perform sustainability reporting assurance.

In the event of identified irregularities, an auditor may face penalties, such as being prohibited from performing assurance activities, removal from the register, or a financial penalty (up to half a million złotys).

The Act also regulates the scope of auditors’ responsibilities concerning sustainability reporting. These include:

• Assessment of double materiality – that is, whether or not the company has conducted the analysis in accordance with the standards assessing the process
• Compliance of disclosure with the ESRS (European Sustainability Reporting Standards)
• Compliance with Regulation (EU) 2020/852 of the European Parliament and Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investments (the taxonomy)
• Correctness of the preparation of the report (in XHTML format) and tagging

The proposed regulations cover national standards for sustainability reporting assurance, which will apply until the European Commission introduces uniform standards. According to the timeline, standards providing limited assurance are expected by 1 October 2026, and standards providing reasonable assurance will be introduced by 1 October 2028. In this regard, on 31 October 2024, the Polish Chamber of Certified Auditors published a draft of the national standards (KSUA 3002PL), which, after consultations and the enactment of the law implementing the CSRD directive, will be applicable in Poland.

Summary
Sustainability report assurance is inevitable, so it is advisable to choose an audit firm early on during the preparation of the reports (for example, when conducting a double-materiality analysis). This will facilitate both the preparation of the report and its assurance. The regulations allow the same entity to conduct both the audit of the financial statement and the ESG report, provided it holds the necessary qualifications. A certified auditor with a deep understanding of the company’s finances is the best choice, as this ensures effective collaboration. National standards will also be crucial, as they will set the direction for the analysis and preparation of the ESG report to meet the assurance requirements.