{"id":9781,"date":"2021-06-02T13:39:08","date_gmt":"2021-06-02T11:39:08","guid":{"rendered":"https:\/heightened-focus-on-esg-and-sustainability-demands-equal-oversight-of-reporting-reliability\/"},"modified":"2021-06-02T13:39:08","modified_gmt":"2021-06-02T11:39:08","slug":"heightened-focus-on-esg-and-sustainability-demands-equal-oversight-of-reporting-reliability","status":"publish","type":"post","link":"https:\/\/vaa.lt\/en\/heightened-focus-on-esg-and-sustainability-demands-equal-oversight-of-reporting-reliability\/","title":{"rendered":"Heightened Focus on ESG and Sustainability Demands Equal Oversight of Reporting Reliability"},"content":{"rendered":"

New IIA report addresses risks and importance of assurance by internal audit<\/em><\/p>\n

LAKE MARY, Fla. (June 2, 2021) \u2014 As environmental groups, activists, and asset managers step up pressure on major companies to make public commitments to sustainability, leaders in business and government are realizing the urgency and importance of environmental, social and governance (ESG) as an enterprise imperative. Understanding the challenges related to this growing risk area is the focus of Internal Audit\u2019s Role in ESG Reporting: Independent Assurance Is Critical to Effective Sustainability Reporting<\/em>, a new report released today by The Institute of Internal Auditors.<\/p>\n

There is a growing momentum for organizations to strategically manage ESG risks, particularly as investors and regulators push for more comprehensive and uniform reporting on sustainability efforts and pressures increase on executive performance as more organizations tie incentive compensation metrics to ESG goals.<\/p>\n

\u201cInternal auditors continue to focus on risks that can significantly impact their organizations. With the heightened focus on ESG, where failures could affect an organization\u2019s long-term outlook, companies are quickly waking up to the urgency of confronting and responding to these issues seriously and immediately,\u201d said IIA President and CEO Anthony J. Pugliese, CPA, CGMA, CITP. \u201cInternal auditors must be ready to provide objective assurance to management and the board.\u201d<\/p>\n

This report from The IIA explains the risks, the opportunities, and how internal audit can help identify and establish a functional ESG control environment. Its unique, enterprise-wide view also allows it to provide crucial assurance on the effectiveness of assessments, responses, and controls.<\/p>\n

ESG reporting involves a wide array of metrics, requiring organizations to establish policies and implement effective processes and internal controls that will generate reliable information for decision-making, according to Internal Audit\u2019s Role in ESG Reporting<\/em>. \u201cSimilar to financial reporting,\u201d according to the report, \u201cdata used to create sustainability reports are based on the day-to-day operations and decisions driving organizations toward achieving objectives. Proper control activities must be designed and operating effectively \u2014 from the operational steps to the collection and analysis of the data that will be used in reporting.\u201d<\/p>\n

In addition, ESG initiatives and reporting demand sound governance practices, with the governing body, management, and internal audit working \u201ccollectively to align with each other and the prioritized interests of stakeholders.\u201d Internal audit is a key player in effective governance, as detailed in The IIA\u2019s Three Lines Model released in 2020. \u201cThe challenges and complexity of ESG reporting are abundantly evident, and the risks associated with poorly managed reporting can be high in terms of regulatory compliance and reputational damage.\u201d<\/p>\n

To be sure, more companies \u2013 encouraged by investors and public interest \u2013 are responding to ESG challenges with increasingly sophisticated approaches to measuring potential impacts. The IIA report cites a KPMG survey showing 80% of companies around the globe, including 96% of the world\u2019s largest, now report on sustainability. That has prompted regulators to increase their attention on the accuracy of sustainability reports and what they actually reflect.<\/p>\n

\u201cIt is good news so many organizations are focusing on ESG,\u201d Pugliese said, \u201cbut many more are struggling or are ill-equipped to determine exactly what should be reported. A key reason for this is a lack of a single set of standards and uniformity in reporting.\u201d<\/p>\n

In a recent letter to the U.S. Securities and Exchange Commission, The IIA called for uniform climate disclosure by corporations and recognition of the role internal audit plays in providing assurance around complete, accurate, and reliable information. As part of its commitment to addressing such issues on a global level and advocating for independent internal assurance, The IIA is a member of the International Integrated Reporting Council (IIRC). The IIRC and the Sustainability Accounting Standards Board recently announced a merger as the Value Reporting Foundation, with the goal of providing investors and corporations \u201cwith a comprehensive corporate reporting framework across the full range of enterprise value drivers and standards to drive global sustainability performance.\u201d<\/p>\n

\u201cBusiness performance is no longer judged purely on short-term financial returns,\u201d Pugliese wrote in the letter to the SEC. \u201cESG issues represent a broad range of risks, including to external supply chains, internal operations, third parties, general control weaknesses, data accuracy, human capital, and more. A single system of climate disclosures would provide an opportunity for comparability among corporations and investors and allow for more informed business decisions that consider ESG impacts. This also would enable long-term organizational resilience.\u201d<\/p>\n

The IIA report, Internal Audit\u2019s Role in ESG Reporting: Independent Assurance Is Critical to Effective Sustainability Reporting<\/em><\/a>, is now available.<\/p>\n

Media Contacts<\/h2>\n

John Babinchak
+1-407-937-1240\/+1-407-325-5560
John.Babinchak@TheIIA.org<\/a><\/p>\n

Suzanne Dawson
S&C Public Relations Inc.
sdawson@scprgroup.com
+1-646-941-9140<\/a><\/p>\n

About The Institute of Internal Auditors<\/h2>\n

The Institute of Internal Auditors (IIA) is the internal audit profession\u2019s most widely recognized advocate, educator, and provider of standards, guidance, and certifications. Established in 1941, The IIA today serves more than 200,000 members in nearly 200 countries and territories. The IIA\u2019s global headquarters are in Lake Mary, Fla. For more information, visit www.theiia.org<\/a> or www.globaliia.org<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

New IIA report addresses risks and importance of assurance by internal audit LAKE MARY, Fla. (June 2, 2021) \u2014 As environmental groups, activists, and asset managers step up pressure on major companies to make public commitments to sustainability, leaders in business and government are realizing the urgency and importance of environmental, social and governance (ESG) […]<\/p>","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[],"class_list":["post-9781","post","type-post","status-publish","format-standard","hentry","category-iia-naujienos"],"featured_image_src":{"landsacpe":false,"list":false,"medium":false,"full":false},"_links":{"self":[{"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/posts\/9781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/comments?post=9781"}],"version-history":[{"count":0,"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/posts\/9781\/revisions"}],"wp:attachment":[{"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/media?parent=9781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/categories?post=9781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vaa.lt\/en\/wp-json\/wp\/v2\/tags?post=9781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}