SAE 3410: Assurance Engagements on Greenhouse Gas Statements, released by ICAI

ICAI has released Standard on Assurance Engagements (SAE) 3410: Assurance Engagements on Greenhouse Gas Statements.

Given the link between greenhouse gas (GHG) emissions and climate change, many entities are quantifying their GHG emissions for internal management purposes, and many are also preparing a GHG statement:

(a) As part of a regulatory disclosure regime;

(b) As part of an emissions trading scheme; or

(c) To inform investors and others on a voluntary basis. Voluntary disclosures may be, for example, published as a stand-alone document; included as part of a broader sustainability report or in an entity’s annual report; or made to support inclusion in a “carbon register”.

Accordingly SAE 3410 deals with assurance engagements to report on an entity’s GHG statement.

The practitioner’s conclusion in an assurance engagement may cover information in addition to a GHG statement, for example, when the practitioner is engaged to report on a sustainability report of which a GHG statement is only one part. In such cases:

(a) SAE 3410 applies to assurance procedures performed with respect to the GHG statement other than when the GHG statement is a relatively minor part of the overall information subject to assurance; and

(b) The Guidance Note on Reports or Certificates for Special Purposes (hereinafter referred as “the Guidance Note”) (or another SAE dealing with a specific underlying subject matter) applies to assurance procedures performed with respect to the remainder of the information covered by the practitioner’s conclusion.

SAE 3410 does not deal with, or provide specific guidance for, assurance engagements to report on the following:

(a) Statements of emissions other than GHG emissions, for example, nitrogen oxides (NOx) and sulphur dioxide (SO2). SAE 3410 may nonetheless provide guidance for such engagements;

(b) Other GHG-related information, such as product lifecycle “footprints,” hypothetical “baseline” information, and key performance indicators based on emissions data; or

(c) Instruments, processes or mechanisms, such as offset projects, used by other entities as emissions deductions. However, where an entity’s GHG statement includes emissions deductions that are subject to assurance, the requirements of this SAE apply in relation to those emissions deductions as appropriate (see paragraph 76(f)).

The practitioner is required to comply with the Guidance Note and this SAE when performing an assurance engagement to report on an entity’s GHG statement. This SAE supplements, but does not replace, the Guidance Note, and expands on how the Guidance Note is to be applied in an assurance engagement to report on an entity’s GHG statement.

ICAI Announcement dt. 27/01/2021 : Release of SAE 3410 (Assurance Engagements on Greenhouse Gas Statements)

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