As regulatory authorities implement mandatory sustainability reporting requirements, internal audit functions must establish testing protocols to verify the accuracy and completeness of an organization’s Environmental, Social, and Governance (ESG) disclosures.

ESG Metric Accuracy = Disclosed Performance Target Logs <─── Verified via ───> Source Utility & Data Registers

Internal auditors evaluate ESG reporting processes by auditing the underlying data collection systems used to compile non-financial metrics. Auditors trace disclosed carbon emissions numbers back to source utility invoices, verify that health and safety metrics match verified internal incident logs, and check that governance data (such as board diversity statistics or anti-bribery training records) is supported by reliable HR evidence.

The audit team confirms that the organization’s sustainability reporting processes comply with relevant reporting standards, providing the board with objective assurance regarding the integrity of its public ESG disclosures.