Assurance ready ESG

23 February 2024

As sustainable development and climate action continue to gain momentum globally, organizations feel increasing pressure to report their sustainability performance and provide transparency to stakeholders. Sustainability reporting frameworks continue to evolve, and we see global organizations adopting these for measuring, monitoring, and disclosing performance in environmental, social, and governance (ESG) areas.

Today, many governments and regulators are introducing and mandating some form of ESG-related disclosures. As organizations continue to gear towards these new expectations, ensuring the authenticity and accuracy of data will be crucial, as will maintaining an adequate internal exchange and management of information. Designing an internal control framework for non-financial information becomes a business imperative to achieve these objectives. While some large organizations have started to implement internal control frameworks, most businesses have yet to embark on this journey.

Companies must address growing demands – from regulators, standards setters, investors, and other stakeholders – for veritable, comprehensive information on sustainability-related risks and opportunities relevant to their businesses. Many reporting regimes in major market jurisdictions recommend or require assurance of non-financial data to give users of such information more confidence. To be assurance-ready, companies seeking to report on ESG should develop an internal controls framework aligned with best practices, such as the ICIF model. This document details the components of an effective internal control framework for non-financial information.