Center for Audit Quality Weighs in on ESG Reporting

The Center for Audit Quality (CAQ) in a comment letter to the SEC voiced support for a globally accepted ESG reporting system built from existing standards and frameworks that can be adapted to meet the needs of investors in different jurisdictions. The CAQ also shared their view that assurance of climate-related and other company-prepared ESG information performed by a public company auditor can enhance the reliability of this information and offer increased investor protection. The CAQ recently convened a roundtable of board members, public company management, institutional investors, and public company auditors, and found that 87% of participants are supportive of a system for ESG disclosure (including climate) that is built from existing standards and frameworks; and 90% of participants believe that climate-related and other ESG disclosures should be subject to assurance from public company auditors either currently or over time. In its comment letter the CAQ also asserted that a global standard setter is likely necessary for a globally accepted ESG reporting system to be implemented and to operate effectively.