Global Reporting Initiative (GRI) about greenwashing: "We need the audit sector to deliver the extra mile."
With the emergence of a new global system for sustainability reporting taking shape, for both impact and financial disclosure, the attention is turning to the gatekeepers of information: the auditors. Inaccurate and incomplete data undermines the credibility of sustainability information. Beyond making claims to be doing good, companies must be able to back them up.
Disclosure of sustainability related information – be it on enterprise value or impacts – is rapidly moving towards parity with financial information and GRI believes good reporting cannot be achieved without effective controls, and vice versa. This also means the entire governance system for safeguarding the accuracy and completeness of reported data, the so-called four lines of defense also become protagonists:
Control frameworks and day-to-day controls
Management review
Internal audit
External audit
But ‘ESG laundering’, greenwashing, is a challenge that the auditing community alone cannot solve. Standards setters in particular have a necessary role. A multitude of sustainability reporting standards and frameworks does not only increase the cost of compliance but also the cost of auditing. Just imagine if audits need to be undertaken not only for financial reports based on international and national accounting standards, but also on sustainability data using the GRI Standards, ISSB Standards, SEC climate regulation, European Sustainability Reporting Standards (ESRS), the TCFD framework, and other locally set requirements.
Click on the image below to read more about what GRI is doing about all that.
You can also check our post from last Tuesday December 20 to know more about two public consultations by GRI.
