ESG assurance

As market and stakeholder expectations evolve and mandatory reporting requirements quickly approach, the ESG disclosures companies publish must be accurate, reliable, complete, and ultimately, ready for assurance to provide confidence in your business – including transparently reporting on climate action, social issues (e.g., diversity, equity, inclusion, respect for human rights and Indigenous reconciliation) and ethical governance practices.

Regulators are also working at pace to develop ESG-related disclosure rules/standards, including the EU Corporate Sustainability Reporting Directive (CSRD), the International Sustainability Standards Board (ISSB) and the US SEC climate change disclosure rules.

Depending on the jurisdiction, ESG disclosures may require limited or reasonable assurance, the latter having the same rigor demanded in your financial statement audit; we expect eventually many jurisdictions will require reasonable assurance. ESG assurance providers should have the same deep level of understanding of a company’s business model that is required for an audit of financial statements, which is generally the company’s external auditor. When financial statement auditors also provide assurance over ESG information, it can help eliminate redundancy in work performed, better understand interrelations between financial and non-financial information reported, and lead to cost efficiencies in preparing both types of reporting.

• Are your business functions - governance, people, process, technology and data - optimized to deliver the next generation of ESG reporting and assurance?

• Are your ESG metrics and reported performance against targets accurate and complete? Have you undertaken the necessary internal reviews to ensure the reliability of the reporting information? Is the information verifiable to be subject to assurance?

• Have you established a clear timeline for the assurance process? Is your ESG data ready for third-party assurance?

• What processes and controls do you have in place to learn from the assurance process and continually enhance your ESG reporting and assurance practices?

• Have you considered how to effectively integrate the assurance of your ESG reporting with your financial statement audit, ensuring a comprehensive overview of your business for key stakeholders?

KPMG assurance professionals can help bridge the gap and provide assurance across a wide range of sectors, frameworks, and metrics to ensure that you can meet the requirements mandated by regulators and expected by stakeholders. Our teams stand ready to serve the public interest in providing ESG assurance over what truly matters.