As the risks and opportunities associated with ESG come into sharper focus, it’s becoming a business imperative for companies to develop a strategy for ESG reporting — and that they verify the data. Increased scrutiny from investors, new regulatory requirements and shifting consumer expectations mean companies face new pressures to measure, disclose and make progress on ESG initiatives.

Stakeholders across the business spectrum see ESG as a window into a company’s future. ESG reporting and metrics are also an important indicator of a company’s overall health, and how and what you report can lay the foundation for a compelling story about the impact your company is making on the world.

Many of the new global regulatory sustainability standards would require independent assurance of ESG data, such as Scope 1 and Scope 2 greenhouse gas emissions, as a way to bolster confidence in the accuracy of this information in the marketplace.

Companies should have a strategy for validating ESG data and should develop processes and controls that support that data from the sources (internal and external) to reporting. Within its processes, companies should have controls around data collection, calculation and reporting that establish a consistent methodology for collecting timely and accurate information across the value chain.

Working with an independent auditor to validate ESG data can lend credibility to your organization and build trust among key stakeholders at a time when investors are using this information in their decision-making process and there is some skepticism about the robustness and accuracy of these disclosures.

How to move to investor-grade reporting