How can internal audit add value in the Environmental, social, and corporate governance (ESG) space?
In our last piece on ESG, we summarized the key stakeholders in the ESG puzzle, what their roles are, and why they are important. Now, we’ll go a little deeper into the specific role of Internal Audit in ESG engagements.
In ESG, the role of the audit practitioner is to provide a company’s key stakeholders (the board, the investment community, etc.) with an objective assessment of governance, processes and procedures, and underlying data to support espoused objectives. The auditor’s assessment helps to strengthen the claims made by the company in the eyes of others in the ESG community, including investors, ratings agencies, and underwriters.
Pragmatically speaking, internal audit can help with the following:
- Prepare the Sustainability Team, Management, and the Board for limited and reasonable assurance of GHG emissions and other key data points via a readiness assessment
- Verify that processes and controls exist and that they are audit-ready
- Review public-facing disclosures for potential areas of concern to be addressed
Primary Drivers for Internal Audit’s Involvement in ESG evaluations
A practitioner’s evaluation helps to add a layer of credibility to a company’s publicly reported data and statements. Some of the primary drivers for internal audit’s involvement in ESG evaluations include:
Environmental, Social and Governance Resources
- Schneider Downs ESG FAQ
- Schneider Downs ESG Infographic – Putting the ESG Puzzle Together
- Schneider Downs ESG Article – What Are the Key Roles Internal Audit Plays in ESG?
- Schneider Downs ESG Article – Top Ten ESG Questions for Board and Audit Committees
- Schneider Downs ‘Our Thoughts On’ ESG Articles
About the Author
Tony Ielase leads the firm’s Risk Advisory Services (RAS) practice for the Columbus market and has over 25 years of experience providing risk advisory and compliance services to a diversified number of retail, manufacturing, higher education, healthcare, technology, utilities and financial services clients. His areas of expertise include internal audit strategic planning, internal audit co-sourcing, enterprise risk management, compliance assessments, fraud risk assessments, business process improvement and SOX program implementation and optimization, among others. Tony can be reached at [email protected].
About Schneider Downs ESG Consulting
With our industry expertise and extensive knowledge of the risk advisory landscape, the Schneider Downs team can help your organization develop an ESG program, comply with ESG regulatory requirements and evaluate ESG risks and opportunities within the context of your ESG strategy.
For more information, please visit our ESG Consulting page or contact us at [email protected].
