ESG and Internal Audit

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:

  1. 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
  2. Verify that processes and controls exist and that they are audit-ready
  3. 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

About the Authors

Matt Hartman is the Senior Environmental, Social and Governance (ESG) and Sustainability Manager with the Schneider Downs Risk Advisory Practice. Matt has more than 10 years of experience in corporate sustainability and reporting, development of ESG programs and ESG data sourcing and governance and has previously delivered initiatives in line with the Task Force on Climate-Related Financial Disclosures (TCFD), the Global Reporting Initiative (GRI), and the Sustainable Finance Disclosure Regulation (SFDR), amongst others. Matt can be reached at [email protected].

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]

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

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