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COSO (The Committee of Sponsoring Organizations of the Treadway Commission) has released a study with supplemental guidance for organizations to achieve effective internal control over sustainability reporting - using the globally recognized COSO Internal Control-Integrated Framework (ICIF).

‘Achieving Effective Internal Control over Sustainability Reporting (ICSR): Building Trust and Confidence through the COSO Internal Control―Integrated Framework’ introduces ‘internal control over sustainability reporting’ (ICSR) into the internal control lexicon.

“More companies are now in various stages of implementing controls and governance processes over the collection, review, and reporting of sustainability information, including creating multifunctional teams that bring together a company’s sustainability, finance and accounting, risk management, legal, and internal audit professionals,” said COSO Chair Lucia Wind. “In many ways, sustainable business reporting is still subject to evolution and innovation. As a result, it will be a process of continuous improvement including building internal capacity and relevant assurance.”

The supplemental guidance points to several key themes as organizations and practitioners begin or continue their journeys toward establishing and maintaining an effective system of internal control over financial and sustainable business information. Although ICSR is not yet well established in practice, the paper discusses crucial insights that can be gained from the experiences of those organizations that are leading the way.

“This new supplemental guidance is significant and extremely timely given upcoming final rules on climate risk from the SEC and ISSB, not to mention the journey organizations are on to build sustainable management principles into their core mission, purpose, governance, and strategies. The guidance is global, and transcends accounting, reporting, and assurance,” said Wind. “Effective internal control is good for business and applies well beyond external financial reporting as COSO’s ICIF points out. All organizations are on a learning and growth journey to enhance and build trust and confidence in sustainable business information for internal and external decision making.”

Read the document (PDF).

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