With the rising need for formalized Environmental, Social, and Governance (ESG) initiatives in companies, the role of an ESG controller is gaining traction. This dedicated role aims to ensure that data integrity standards are met in ESG reporting and compliance. A recent Deloitte poll indicated that only about 45% of professionals are confident in their organizations’ financial reporting teams’ ability to gather and report ESG financial metrics to meet regulatory requirements. This highlights the demand for a specialized role that can ensure accurate and timely ESG reporting.
An ESG controller is responsible for integrating ESG issues into an organization’s operations and financial reporting protocols. The role involves overseeing ESG-related disclosures in financial processes, contributing to enterprise financial planning, risk management, and decision-making. Key areas of accountability for ESG controllers include ESG reporting process development and integration, ESG reporting and compliance, data management and analysis, and ESG risk management.
ESG controllers play a pivotal role as ESG regulations expand in complexity and across jurisdictions. The manual nature of data collection, aggregation, and verification is a significant driver for this role’s growth. As data collection remains a challenge for ESG efforts, having a dedicated ESG controller to verify data accuracy becomes crucial.
The involvement of the corporate finance function in creating the ESG controller role increases confidence in data integrity across the organization. Companies with finance partners influencing ESG outcomes tend to report higher confidence in data integrity. While the adoption of ESG controller roles is still emerging, it is likely to follow a trend of slow change leading to transformative action, as professionals in this role drive ESG transparency and accountability.
As ESG considerations gain prominence, ESG controllers are becoming increasingly essential in promoting positive change and contributing to a more sustainable future for businesses and society.
By FCCT Editorial Team
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