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How to Audit ESG Risk and Reporting
Key Considerations for Developing Your Environmental, Social and Governance Audit Strategy
Global interest in environmental, social, and governance (ESG) issues, compliance, and reporting has grown dramatically since 2020. Against the backdrop of climate change impacts, social change movements, and the COVID-19 pandemic, consumers, employees, investors, governments, and other stakeholders reexamined and recalibrated their expectations for how businesses can be held accountable for responsible ESG performance.
While ESG’s environmental dimension has long enjoyed stakeholder focus, social and governance concerns also rose to the forefront. Now, even private companies are held up to a public microscope. Ethics, diversity and inclusion, human rights, labor practices, material sourcing and supply chain, access, data security/privacy—it’s all fair game for public scrutiny.
Unsurprisingly, these changing stakeholder expectations are resulting in increasing demand for ESG transparency, accountability, and assurance. Both in the US and globally, regulators are beginning to draft and implement more formal ESG performance standards. But many stakeholders are going a step further, pushing businesses to embrace ESG for value creation.
The overarching message is that mere compliance isn’t enough. Consumers, capital investors, employees, and other stakeholders want businesses to integrate ESG considerations into the very core of how they do business. They want strong ESG value propositions and performance, and they are ready to withhold their business, funding, and support to ensure they get them.
Ultimately, regulators’ reporting standards and frameworks will help you direct your ESG audit, risk management, and reporting activities. But it’s up to your organization to go the extra mile stakeholders are demanding. Is your organization focused on ESG as a path to long-term value creation? AuditBoard and Deloitte’s new guide, How to Audit ESG Risk and Reporting, can help you get on track.
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