Overcoming Obstacles to ESG Maturity

Jennifer Post


October 2, 2023

According to Auditboard’s 2023 ESG Maturity Benchmark Report, many organizations face obstacles when trying to  accurately capture and report ESG data and develop effective ESG risk management practices. One major issue is financial, with 45% of respondents saying they do not have a budget dedicated to ESG. Additionally, nearly 24% of respondents do not collect any evidence to support their ESG metrics, while 42% only collect evidence for some metrics, increasing the potential for greenwashing allegations. Many organizations also fail to include ESG risks in their ERM strategy (40%) and have not conducted materiality assessments for ESG topics (35%). With shareholder demand and SEC requirements looming, compliance is a crucial issue, but the report noted that less than one-third of respondents have implemented ESG controls. The report recommended that organizations: map out their ESG strategy; invest in technology to support ESG programs and processes; develop reporting and metrics verification capabilities; and build a strong controls program to enhance the accuracy, consistency and reliability of the data. “Ultimately, embedding ESG into a company’s culture and operations takes time,” the report said. “Reaching a state of ESG maturity is a journey that requires careful planning, strategic implementation and a proactive mindset.”

Jennifer Post is an editor at Risk Management.