IFAC empowers accountants for ESG reporting with an integrated approach

Posted on December 24, 2023 by Editor

In support of robust sustainability reporting, the International Federation of Accountants (IFAC) has released a report, ‘Building Trust in Sustainability Reporting: The Urgent Need for Integrated Internal Control,’ which aims to equip professional accountants for upcoming mandatory sustainability reporting requirements.

With rapid developments towards mandatory sustainability reporting and assurance, its essential for companies to establish processes to ensure sustainability data is reported at the same high levels of quality as financial data.

IFAC emphasises the need for an integrated internal control environment to foster quality data. By working from an integrated perspective, companies can develop connectivity between functions, processes, and systems, resulting in enhanced data quality and provenance.

IFACs guidance on integrated internal control emphasises the need to seamlessly integrate sustainability information into existing internal control and governance frameworks, which can be modified to incorporate material financial and non-financial related sustainability information into the corporate reporting cycle.

Leveraging established frameworks, such as the COSO Internal Control—Integrated Framework, is posited as a powerful means to enhance data quality and connectivity between sustainability and financial reporting.

The guidance also outlines unique challenges associated with sustainability information, and the role of the finance function in enhancing the quality and relevance of sustainability information.

As global markets shift towards sustainable finance, IFAC’s CEO, Kevin Dancey, asserts that an integrated internal control approach positions sustainability information on par with financial information. As a framework for delivering ESG reporting, it not only enhances assurance readiness but also sets the stage for transitioning to more sustainable business models by equipping businesses with quality sustainability data.

Read IFACs guidance for achieving integrated internal control here.

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