Takeaways

• Internal auditors are moving beyond compliance to become key drivers of ESG value creation.
• Strong ESG assurance helps organizations build trust amid tightening global sustainability rules.
• Upskilling and integrated audits are critical to making ESG reporting credible and decision-ready.

Internal auditors are taking on a bigger role as companies respond to rising expectations around ESG and sustainability. Once focused mainly on compliance, auditors are now helping organizations turn ESG into a source of long-term value. This shift was a key theme in a recent expert webinar hosted by ERM CVS.

ESG Assurance Moves up the Agenda

Demand for ESG assurance is growing as regulators and investors push for reliable, transparent disclosures. Across regions, sustainability reporting is becoming mandatory. In Europe, rules such as the Corporate Sustainability Reporting Directive are setting stricter standards. In the U.S., state-level greenhouse gas rules are expanding, while Asia-Pacific markets are aligning with global frameworks.

In this environment, ESG assurance is no longer a box-ticking exercise. Internal auditors are well placed to test controls, verify data, and help deliver finance-grade sustainability information. Close collaboration between finance, IT, and sustainability teams is essential to ensure data accuracy and consistency.

Read More: ESG Performance Explained: Metrics, Frameworks & Measurement

Incorporating ESG into Governance and Risk

Auditors also play a central role in incorporating sustainability into governance and risk frameworks. By aligning ESG risks with enterprise risk management, organizations can move from reactive compliance to proactive decision-making.

Climate-related disclosures outlined by the Task Force on Climate-related Financial Disclosures continue to shape audit priorities. Auditors are increasingly reviewing how climate risks and opportunities are built into strategy, scenario analysis, and performance metrics. Alignment with global standards such as GRI and SASB supports comparability and credibility.

Integrated Audits Gain Traction

Many companies are shifting toward integrated audits that combine financial, regulatory, and sustainability assurance. This approach reduces duplication, improves efficiency, and offers a more holistic view of organizational risk and performance.

Internal auditors are being asked to strengthen ESG governance, assess regulatory compliance, recommend relevant metrics, and support materiality assessments. As sustainability maturity varies across organizations, audit involvement often increases in early stages and evolves as internal capabilities grow.

Fixing ESG Reporting Gaps

Challenges remain in aligning ESG reporting across departments and sites. Common issues include inconsistent data quality, unclear ownership, and skills gaps. Practical steps such as appointing an ESG controller, defining clear responsibilities, improving audit trails, and upskilling teams can significantly strengthen reporting.

Internal audit functions are increasingly engaged to test sustainability-related controls and validate whether processes are working as intended.

Upskilling for the Future

The move from compliance to value creation requires new skills. ESG auditors need strong data literacy, regulatory awareness, and digital competence, alongside soft skills such as stakeholder engagement and change management. Continuous learning, supported by modular and standardized training, is becoming a priority.

Looking ahead, multi-year ESG audit roadmaps are gaining importance. The upcoming shift from ISAE 3000 to ISSA 5000, effective from 2026 in many jurisdictions, will further raise expectations for sustainability assurance.

Also Read: ESG Data Providers: How to Choose the Right Fit for Your Business

Summary

Sustainability is a journey, and internal auditors are at its center. By embracing integrated assurance, building ESG capabilities, and fostering collaboration, auditors can help organizations meet regulatory demands while creating lasting value.

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Source: ERM