Environmental, social and governance risks better be on your radar

In his blog, IIA President and CEO Richard Chambers shares his personal reflections and insights on the internal audit profession.

U.S. SEC: Environmental, Social, and Governance Risks Better Be on Your Radar

Organizations are under increasing pressure from shareholders, regulators, and other key stakeholders to report on environmental, social, and governance (ESG) issues. The movement to accurately measure and report the impacts that organizations have on the environment, climate, natural resources, workforce, and community (and their related ethical implications) is rapidly changing how the public interacts with and values businesses and government institutions.

The business world is clearly responding. In 2011, 20% of companies on the S&P 500 issued reports related to sustainability, according to the Governance & Accountability Institute. Today, that number is 90%. It is not surprising, then, that measuring the accuracy of this new discourse has come under increased regulatory scrutiny.

The U.S. Securities and Exchange Commission announced on March 4 that it has created a 22-member Climate and ESG Task Force within the Division of Enforcement to monitor how organizations report their climate- and ESG-related disclosures to investors. Based on that announcement, it is clear the task force is focused on enforcing reporting rules.

Read the whole blog: U.S. SEC: Environmental, Social, and Governance Risks Better Be on Your Radar