Sustainability - Professional Ethics
Why are ethics important in sustainability?
Professional ethics and independence are the foundation of trust in preparing, presenting, and assuring financial information.
They are equally important for non-financial information such as sustainability disclosures which are more subjective and future oriented.
What are the ethical standards for sustainability?
Currently, there are no specific ethical standards for sustainability reporting and sustainability assurance in Canada. The CPA Code of Professional Conduct (“CPA Code”) applies to all CPAs no matter what professional services they offer. For example, CPAs providing sustainability assurance services would apply the existing independence rules for assurance engagements along with the fundamental principles.
On the international stage, in December 2024 the International Ethics Standards Board for Accountants (“IESBA”) approved the International Ethics Standards for Sustainability Assurance (“IESSA”). Except for assurance work performed at value chain components, IESSA is effective for assurance engagements on sustainability information for periods beginning on or after 15 December 2026 or as at a specific date on or after 15 December 2026. See Final Pronouncement for details.
What is greenwashing and what are the ethical obligations of a CPA?
Greenwashing usually refers to the intentional practice of publishing misleading sustainability information which often gives users a false impression about how well an organization, or an investment is doing in relation to its sustainability goals.
The fundamental principles are the guiding principles within the CPA Code. The fundamental principle of objectivity requires CPAs to remain objective and not be influenced by bias or others. The CPA Code also addresses issues around false and misleading information under Rule 205 which requires CPAs to not associate with false or misleading information.