Ethics and independence requirements for sustainability assurance engagements are changing
PES 1 International Code of Ethics for Assurance Practitioners (Including International Independence Standards) (New Zealand) has been updated to include International Independence Standards (New Zealand) for Sustainability Assurance Engagements in a new Part 5.
If you perform engagements over greenhouse gas disclosures required by the Financial Market Conduct Act 2013, you will need to apply Part 5. The reissued PES 1 applies to periods beginning on or after 15 December 2026.
Navigating PES 1
To help you navigate PES 1, our Guide to the Code is a helpful tool which explains the structure of PES 1 and how to use it. It clarifies the difference between requirements and application material, and the meaning of drafting conventions. It is essential reading for those new to or unfamiliar with the Code.
What you need to know
Key Topics in Part 5 gives a good overview of why the standard was developed and how it supports sustainability assurance.
If you perform financial statement audits, many concepts will be familiar to you. However, Part 5 applies to a broader range of practitioners and includes new requirements. The following new sections might be especially relevant:
group sustainability assurance engagements, including different requirements depending on whether the assurance work is performed at a group component or value chain component (section 5405)
another practitioner whose assurance work is used in a sustainability assurance engagement (section 5406)
long association of personnel and leader rotation requirements, which also address when an individual is a member of both the sustainability assurance team and the audit team for the same client (section 5540).
Part 5 also includes New Zealand specific paragraphs. These mirror New Zealand specific additions in other parts of PES 1. A full list of New Zealand amendments is included in the conformity statement at the end of PES 1.
Prepare for implementation
Most of Part 5 applies for periods beginning on or after 15 December 2026, so now is a good time to prepare to apply the new requirements. The value chain provisions apply to periods beginning on or after 1 July 2028.
There are also transitional provisions relating to long association, non-assurance services and the use of the assurance work of another practitioner. We will share more information about these provisions in future sustainability assurance updates.
