In its reaction to the European Financial Reporting Advisory Group (EFRAG) consultation on the Draft of European Sustainability Reporting Standards (ESRS), the European Confederation of Institutes of Internal Auditing (ECIIA) is strongly advocating that the EFRAG provides necessary clarity on the role of Internal Audit has in light of ESG matters.
To be precise, since ESG reporting will be ultimately handled by internal processes affected and controlled through internal governance, the ECIIA suggests referring to Internal Auditing specifically in the cases of ESRS 2 and ESRS G1, which deal with matters on workforce assurance and disclosure as well as governance structures, internal controls and risk management in a broad ESG context. Furthermore, internal audit functions (IAFs) should be established by corporations and organizations of a certain size as part of ESG standards.
In order to ensure a common understanding, the ECIIA additionally recommends providing a distinctive definition of Internal Audit within the assurance process as part of the ESRS as well as to foster cooperation with external auditors.
You can download the summary reaction here.