Internal Audit's role in ESG

Environmental, social, and governance (ESG) issues are becoming increasingly relevant for all institutions. Companies understand that businesses embracing ESG are best able to secure talent, strengthen the employee value proposition, attract loyal customers, and raise capital.

As a result, sustainability is generating a new type of risk: ESG risk.

Companies have begun reimagining their governance structures over ESG, creating steering committees composed of executive leadership and making strategic decisions about commitments, actions, and disclosures.

Companies are also adjusting business risk strategies and corresponding risk appetite statements—making sure roles and responsibilities are fully transparent throughout all three lines of defense.

Internal audit, in particular, can play a critical role in providing objective assurance and advice on ESG reporting and sustainability matters more broadly.

KPMG’s Internal Audit methodology is flexible and can be tailored to each company’s specific needs. Internal audit service offerings can range from examining aspects of the company’s ESG governance policy such as high-level oversight, risk assessment, due diligence procedures, and awareness to assessment of controls in place to support existing ESG commitments. The suite of assessments identified below can be separately performed or executed in phases as part of an overall readiness ESG assessment.