Leveraging Internal Audit to Strengthen ESG: A Powerful (and Underused) Tool for Better Governance, Better Data and Better Reporting

As sustainability expectations accelerate, many organisations are struggling with one central challenge, “How do we ensure our ESG information is credible, consistent, and reliable enough to base decisions on, and confident enough to report publicly?”

I’ve supported organisations in building ESG strategies, enhancing governance, maturing reporting processes and preparing for CSRD and other evolving frameworks. One of the most powerful, yet often overlooked, mechanisms for strengthening ESG foundations is the internal audit function.

During my time in the Big4 environment, I worked with clients in an advisory capacity to support their internal audit teams in conducting ESG-focused audits as subject matter experts, helping organisations evaluate the robustness of their processes serving as independent specialists guiding their internal controls.

The insight from those engagements is clear. If ESG maturity is the destination, internal audit is one of the strongest vehicles to get you there. And yet, many organisations still aren’t using it.

In this article I outline why internal audit is a strategic asset for ESG, and what an effective ESG internal audit program should include.

Why Internal Audit Is a Game Changer for ESG

Internal audit has always been positioned as the guardian of governance, controls and risk management. ESG, at its core, is no different. Environmental, social and governance information is only as strong as the systems that generate it. When used effectively, internal audit can help organisations:

1. Identify weaknesses in ESG data quality

From Scope 1, 2 & 3 emissions to HR metrics, safety data, supplier information or governance processes, ESG is full of manual, judgement-based and fragmented data sources. Internal audit plays a vital role in validating how that data is collected, checked and reported.

2. Strengthen ESG governance and accountability

Internal audit helps uncover gaps in roles, responsibilities and decision pathways. This is essential for companies preparing for sustainability reporting aligned to CSRD, ISSB, TCFD or other frameworks.

3. Diagnose process inefficiencies and blind spots

ESG touches every part of the organisation operations, HR, procurement, finance, strategy. Internal audit is uniquely positioned to break down silos and reveal where processes are unclear, duplicated or inconsistent.

4. Build confidence in public disclosures

Whether reporting to investors, customers, regulators or the public, the credibility of ESG information is now scrutinised in the same way as financial data. Internal audit helps organisations test their readiness before entering the assurance environment.

5. Support transition planning and long-term resilience

Through risk-based reviews, internal audit helps companies understand whether ESG risks and transition risks are properly identified, assessed and monitored enabling better strategic decisions.

Put simply, internal audit provides the discipline, structure and transparency that ESG desperately needs.

What Does an ESG Internal Audit Actually Look Like?

ESG audits can take many forms depending on organisational maturity. During my time supporting clients, I worked on internal audits that covered:

Environmental data controls

• Scope 1, 2 and 3 emissions

• Energy consumption

• Waste, water and resource data

• Environmental KPIs used in reporting or investor disclosures

Social data and governance

• Diversity, equity and inclusion metrics

• Health, safety and wellbeing data

• Human rights and responsible sourcing processes

• Community engagement records

• Supplier due diligence mechanisms

Governance and strategy

• ESG governance structures

• Board oversight and reporting pathways

• Materiality assessment process integrity

• Integration of ESG into risk management

• Internal controls over sustainability reporting

A well-designed ESG internal audit is highly diagnostic. It shows not only where gaps exist but also why, and how to fix them.

What Makes an ESG Internal Audit Program Successful?

In my experience, the most impactful ESG internal audits include the following components:

1. A clear scope linked to real risks

Avoid generic checklists. Focus instead on the ESG issues most material to your organisation.

2. Cross-functional involvement

ESG is not “owned” by one team. Successful audits involve operations, HR, procurement, finance, sustainability and risk.

3. Subject matter expertise

Most internal audit teams are not ESG data specialists, and they shouldn’t have to be. Bringing in external ESG advisors to support them results in deeper insights and higher quality findings.

4. Testing both process and controls

Look beyond whether data exists. Examine how it is generated, checked, stored, analysed and interpreted.

5. Forward-looking recommendations

Effective ESG internal audits offer actionable, practical improvements, not abstract suggestions.

6. An understanding of reporting expectations

Whether preparing for CSRD, ISSB, TCFD or voluntary disclosures, internal audit must align its work with reporting requirements.

7. Integration with enterprise risk management (ERM)

The companies that perform best integrate ESG internal audit activity into broader risk frameworks.

Why This Matters Now

As sustainability reporting becomes more regulated and more scrutinised, the margin for error narrows. Inaccurate data, weak governance and inconsistent processes not only create reputational risk, they are increasingly becoming legal and financial risks. Organisations cannot rely on good intentions or ad hoc processes. Internal audit is one of the strongest tools available for building ESG integrity now so that future reporting and assurance can stand on solid ground.

And most importantly, companies do not need to wait for external regulatory pressure. ESG internal audits are powerful regardless of where an organisation is on its sustainability journey.

I’ve seen firsthand how transformative ESG internal audit can be. It builds confidence, strengthens governance, reduces risk, and prepares organisations for credible, trustworthy sustainability reporting. And yet many companies are simply not leveraging this capability.

If you are beginning to build your ESG foundations, or if you are preparing for future assurance and want confidence that your data and processes can withstand scrutiny, internal audit is one of the most strategic places to start.

Orogen8 supports organisations in designing and performing ESG internal audits by acting as a subject matter expert alongside your internal audit team. If you’re considering this type of diagnostic review, I’d be happy to have a conversation.