ESG reports will soon require third-party assurance. Here’s how to get ready

https://www.greenbiz.com/article/esg-reports-will-soon-require-third-party-assurance-heres-how-get-ready

New ESG reporting regulations demand not just disclosure, but rigorous third-party assurance of ESG data, aligning it with financial reporting standards. Regulations like the EU’s CSR Directive and upcoming SEC and California rules mandate corporations to gain third-party assurance for their climate and ESG disclosures by as early as 2025. This has caught 75% of businesses unprepared, lacking the necessary policies and systems. Assurance, divided into limited and reasonable categories, comes at a significant cost, but if strategically utilized, it can mitigate risks and reduce the cost of capital. To prepare, companies can leverage internal audit teams, appoint ESG controllers, work with existing auditors, and utilize audit-ready ESG software platforms.