ESG reporting through the Controllership playbook

March 21, 2023

A blog post by Beth Kaplan, Dina Trainor, and Matt Hurley, Deloitte & Touche LLP

Controllership functions have developed transformative skill sets during recent disruption and accounting challenges driving rapid changes in the marketplace. While Controllership can continue to be a champion with traditional accounting transformations, it also has an opportunity as a catalyst to drive even more significant strategic organizational changes with ESG reporting and position itself as a leader in the evolving ESG landscape.

Controllership’s next big step: Leading the ESG journey

The Controllership function can position itself as a leader in the growing requirement of organizations to prepare for and operationalize ESG reporting and other initiatives within the organizational ESG landscape. The Controllership organization has been a pioneer in multiple accounting transformations—from SOX modernization to digital transformation and closing the books in new hybrid environments. Controllership can also position itself at the forefront of ESG reporting. It can continue to be a Steward and Operator, but there is an opportunity to also be a Catalyst and Strategist to drive more expansive organizational changes with ESG reporting. Let’s see what this can look like:

Operator: Ensuring the skills, quality, and efficiency of the Controllership function
Ensure Controllership’s operating model efficiently and effectively provides quality services to the company, such as ESG capabilities, costs, and talent.

Steward: Managing ESG reporting risks and compliance
Manage ESG reporting risks by identifying risks, modeling risks, and mitigating internal control development to comply with regulatory reporting requirements.

Catalyst: Implementing the ESG reporting strategy and steering operations
Stimulate and drive behaviors across the organization to execute strategic, sustainability, financial, and integrated reporting objectives by prioritizing initiatives that add value to the company.

Strategist: Setting strategic goals and making decisions
Lead by setting and aligning ESG strategic business direction, value creation, and financial strategies impacting the long-term future performance and strategy of the company.

Controllership’s critical role in the ESG operating model

Controllership is positioned to play a pivotal role in integrating the ESG reporting and operating model to ensure the organization is prepared for evolving environmental and societal risks, opportunities, and disrupters. Financial planning and reporting, ESG-linked financing, data and analytics, and process and controls will all be involved in the ESG reporting process as the regulatory requirements and ESG corporate landscape expands.

The first step: Thinking through the ESG operating model

It is important to remember that ESG reporting is a journey. The first step to operationalizing the process is to think through it. Think about it through the controllership lens. To start, what work needs to be done to comply and succeed in your ESG reporting? This may include data sourcing, gathering, and management; data enrichment and calculations; and reporting and analytics. Next, where will work get done, and who will do it? While Controllership can be the Catalyst, Strategist, Steward, and Operator, cross-functional collaboration is needed, and multiple functions will play a role in the ESG process. Finally, how will the work get done? Emerging technology platforms and alternative delivery models may enable the ESG sustainability reporting process in an operating model structured around a center of excellence.

While this is only the beginning of the ESG journey, and implementing ESG sustainability standards is not yet a requirement, putting these systems in place now to prepare for these requirements is important given the size and complexity of the ESG sustainability space. Listen to additional ways Controllership can integrate ESG reporting and real stories from industry leaders and how they plan to evolve their operating models to be strategic ESG reporting leaders in our webcast, Operationalizing ESG reporting readiness through the Controllership playbook.