Deloitte prepares clients for a climate of change

A company’s ESG story remains essential for sustainable growth

With the world disrupted by the COVID-19 pandemic, compounded by growing societal tensions and increasing demands from investors, corporate America is clearly at an inflection point with respect to its role in society. Auditors can play an integral role in helping clients embrace transparency and deliver the environmental, social, and governance (ESG) information stakeholders need to make better informed decisions.

Growing evidence consistently shows that companies with strong ESG performance outperform the market. However, while 90 percent of the S&P 500 provide some sort of ESG disclosure, investors remain dissatisfied with the quality of the information. Auditors are equipped to improve the reliability of their ESG information by providing comprehensive enterprise risk, strategy, and disclosure services—from risk assessment through assurance and governance considerations—and solutions for specific KPIs, such as climate risk and scenario planning; environmental, health, and safety; and sustainable supply chain.

During the COVID-19 pandemic, there has been an even greater interest in how companies prioritize the health, safety, and wellness of their employees, customers, communities, and supply chains. Investors and other market participants have doubled-down on their expectations of companies and boards—demanding they balance the needs of all stakeholders. It’s clear that the COVID-19 pandemic has underscored the role of ESG principles as central to business risk and strategy, as well as building credibility and trust with investors and the public at large.

The emergence of ESG as an essential part of business strategy provides unique opportunities for auditors to align their personal and professional passions.

Christine Robinson, Audit & Assurance senior manager said, “I’ve always had a passion for the environment, which, combined with my audit experience has afforded me the opportunity to focus on sustainability for over eight years. While there are many aspects to sustainability and what we do, I like to boil it down to helping companies measure, manage, and disclose their ESG performance. I’m making an impact that matters, and helping other companies do the same.”

While it remains to be seen whether we are witnessing a permanent transition from the primacy of shareholder capitalism to a more robust stakeholder capitalism, there is little doubt that ESG factors are becoming a key determinant of financial strength.

This article contains general information only and Deloitte is not, by means of this article, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This article is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

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