Closing the Confidence Gap in Sustainability Data
Excerpt from CFO Magazine, "Closing the Confidence Gap in Sustainability Data," by Robert H. Herz
Investors, financial analysts, and rating agencies around the world are increasingly seeking relevant and trustworthy reports on sustainability performance to help guide their assessments of a company’s value-creation capacity and capability. Therefore, companies that utilize effective internal controls around nonfinancial data will earn greater confidence from key stakeholders and likely earn a value premium relative to their peers.
It is in this spirit that Brad J. Monterio, Jeffrey C. Thomson, and I have coauthored a thought paper, Leveraging the COSO Internal Control—Integrated Framework to Improve Confidence in Sustainability Data. Stated simply, we believe that effective internal controls are good for business and good for society.
Sustainability performance data — often referred to as “nonfinancial,” “balanced scorecard,” “performance dashboard,” “environmental, social, and governance (ESG),” or “integrated reporting” data — continues to increase dramatically in importance as organizations seek to improve their enterprise performance systems and processes. They are doing so to generate sustained value — ethically and responsibly — over the longer term in an increasingly complex and demanding global economy.
Robert H. Herz is a board member of the Sustainability Accounting Standards Board (SASB) Foundation and former chairman of the Financial Accounting Standards Board (FASB). He also serves on the Workiva (NYSE:WK) Board of Director.
For the latest information and news, visit The Workiva Newsroom.