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Ask the Expert • SUSTAINABILITY

Integrating ESG into business processes

Q How has the environmental, social, and governance (ESG) landscape
evolved this past year?

A A shifting view of corporate purpose and a recognition that there is clear
value derived when companies proactively identify and manage performance of
relevant environmental and social-related impacts have created unprecedented
demand for transparency and accountability. Growing expectations for
consistent, reliable, and transparent ESG and climate-related disclosures
are being driven by investor demand, stakeholder pressure, and regulatory
attention. Regulatory bodies have recognized the growing importance of ESG
and climate-related disclosures with proposed rulemaking taking shape in
the United States, the European Union, and other parts of the world. Investor
attention continues to mount around meaningful corporate action related to
broad ESG matters, with the focus increasingly shifting to the financial relevance
of climate-related risks and how the audited financial statements reflect the
Kristen B. Sullivan financial impact of climate-related risks.
Sustainability and ESG
Services Leader Q Why is it important for companies to establish an integrated approach
Deloitte & Touche LLP to ESG impacts?

Kristen B. Sullivan is a partner with A ESG impacts and dependencies can no longer be a set of activities that are
Deloitte & Touche LLP and leads managed in a way that is disconnected from the business or managed by only
Sustainability and ESG Services, one part of the organization. Innovating new products and services with ESG
working with clients to help address attributes to capture market share and meet changing customer expectations
their sustainability and nonfinancial requires a talent model with the necessary ESG skill sets and incentives to
disclosure strategy needs. She drive the strategy. These considerations need to be embedded into the way the
also serves as the Deloitte Touche company is organized, including aligning ESG factors to broader enterprise risk
Tohmatsu Limited’s Global Audit considerations and strategic allocation of resources. This integration of ESG
& Assurance Sustainability and factors helps companies gain more timely insights into emerging risks and the
Climate Services Leader and the strategic choices that will allow them to continue to drive value through ESG.
Integrated Reporting Community
Practice Leader. Q What are the key considerations for companies that implement ESG
initiatives?

A As the regulatory regime and standard-setting landscape take shape,
there will be a growing emphasis on ESG governance and an effective control
environment. Key actions for companies include establishing or refining ESG
governance; enhancing controls over ESG reporting; preparing for accelerated
reporting timelines; obtaining or increasing the level of assurance over ESG and
climate-related information; aligning disclosures with standards and frameworks
Deloitte refers to one or more of Deloitte toward SEC disclosure readiness; and considering ESG-related implications to
Touche Tohmatsu Limited (DTTL), a UK financial statement line items.
private company limited by guarantee,
its network of member firms, and their This publication contains general information only, and Deloitte is not, by means of this
related entities. In the United States, publication, rendering accounting, business, financial, investment, legal, tax, or other
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US member firms of DTTL, their related advice or services, nor should it be used as a basis for any decision or action that may
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