NEW Issue of Tone at the Top — Internal Audit and the Board’s ESG Committee

Urgency to act on ESG Demands Independent Assurance

Growing environmental, social, and governance (ESG) concerns are clearly manifesting themselves in greater demands on boards, as shown by recent survey results revealing that climate risk is a key focus area of investors. Further, efforts on sustainability reporting and disclosure are also coming into focus, with the U.S. Security and Exchange Commission’s proposed mandatory climate-risk disclosures and proposed sustainability and climate reporting standards issued by the International Sustainability Standards Board.

The June issue of Tone at the Top explores four reasons for internal audit’s deep involvement in emerging, and urgent, ESG issues, as supported by studies from The IIA, EY, and Deloitte. It also makes a compelling case for internal audit to have a continuing, direct line of communication with whichever board committee oversees ESG.

Key takeaways include:

• Internal audit can provide insights that the committee and board may be missing.
• Internal audit’s input can support reporting metrics, coordination of financial and non-financial reporting, and materiality assessments, and more.
• Involving internal audit is an acknowledged strategy for advancing ESG maturity.
• Internal audit’s contribution is based on deep knowledge of the organization and of ESG considerations that may not be available from other sources.