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How EY can Help
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As regulatory enforcement and public intolerance of corporate misconduct increase, EY professionals help you strengthen your integrity and global compliance frameworks. And, should violations occur or allegations of fraud or corruption arise, the EY Forensics teams help you respond quickly to safeguard your business.
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3. Design and implement an agile ESG governance framework and processes that allow the organization to pivot as regulations change
This is particularly important as new regulations, such as the EU’s CSRD, are enacted. First, implement a comprehensive risk assessment methodology that can incorporate new ESG areas and respond to changing international standards. Use risk assessment output to identify areas for improvement within ESG programs from a governance perspective, and develop measures in the form of KPIs and key behavioral indicators (KBIs) against which to measure progress. This includes embedding KPIs and KBIs to track progress and enable accountability for the company’s ESG activities and performance.
4. Implement a robust reporting process to ensure data integrity
One-third of respondents (34%) identified unreliable, inconsistent or inaccurate data as the greatest ESG compliance challenge. A similar number (34%) identified a top priority as defining and gathering necessary data sets for ESG reporting. Data integrity is a significant risk area within ESG reporting and complying with regulatory requirements. It also risks the transparency of disclosures. Companies should leverage technology and automation to build workflows that gather, compute and monitor performance metrics in a consistent and reliable manner. Nonfinancial ESG disclosures should be incorporated into existing disclosure and control procedures for external financial reporting, with tested internal controls and record- retention policies that provide assurance in the quality and reliability of ESG reporting. If the organization has confidence in its nonfinancial ESG data and due diligence processes, it will have more confidence in both its financial and nonfinancial disclosures and reporting.