Empowering boards to embrace sustainability obligations practical guidance

Posted on November 11, 2023 by Editor

Accountancy Europe, ecoDa, and ECIIA have jointly issued a guidance document to assist boards in integrating environmental, social, and governance (ESG) factors into their business models. It comes in response to the growing demand from stakeholders, regulators, and policymakers for enhanced sustainability performance and transparency from companies.

This publication addresses practical questions that company boards should contemplate concerning sustainability transition planning – including surrounding sustainability information, disclosure, and assurance.

The imperative for companies to embrace sustainability goes beyond compliance with regulations, it observes. Transitioning to a sustainable economy has significant strategic implications. Companies that effectively adapt to market expectations stand to gain a competitive edge and generate long-term value.

The focus on sustainability reporting also reflects new legal requirements, such as the EU Corporate Sustainability Reporting Directive (CSRD), highlighting the importance of gathering relevant, reliable, and high-quality sustainability data.

The guidance underscores the need for companies to connect financial and sustainability reporting to improve decision-making, avoid inconsistencies, and provide a holistic view of factors influencing value creation.

Internal auditors also play a pivotal role in providing assurance on sustainability risk assessment and controls. They should integrate ESG into their risk assessments, audit engagements, and audit reporting, ensuring it aligns with broader strategic objectives.

As sustainability reporting now requires external assurance, selecting a qualified assurance provider becomes essential, and the guidance suggests criteria for making this choice. The governing body and audit committee must ensure the independence and competency of the assurance provider.

This guidance is a useful resource for boards navigating the complex landscape of sustainability reporting and offers practical insights into embedding sustainability into their strategies.

Read the guidance here.

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