Sustainability data is becoming central to how companies report and make decisions, but the internal controls around it are lagging well behind what’s standard for financial data, according to a new joint report from ACCA and the Institute of Internal Auditors (IIA). The findings draw on roundtables and interviews with around 50 ACCA and IIA members plus survey responses from over 900 professionals worldwide.
The gap between ambition and reality is stark. While 63 per cent of respondents rated controls over sustainability data as very or extremely important, only 49 per cent said their leadership actually supported building them, and fewer than a third rated their entity’s existing controls as adequate. Data quality is the biggest culprit: 55 per cent of respondents cited poor data quality as a high-impact challenge, closely followed by a lack of skills and knowledge (56 per cent) and a lack of resources (56 per cent). Process documentation is patchy too, with 40 per cent saying their sustainability data flows are minimally or not at all documented, and standards are fragmented: only 4 per cent of entities use both the two major frameworks (ISSB and the EU’s CSRD) together, with most relying on just one.
The report’s recommendations centre on treating this as a genuine transformation rather than a bolt-on exercise. It calls for organisations to embed sustainability into strategic objectives and KPIs from the top down, clarify data ownership and governance at every step, invest in technology and automation to reduce manual error, and build capability across all three lines of defence, first-line operations, second-line risk and compliance, and internal audit as a third line. It singles out internal audit for a more advisory, forward-leaning role: rather than waiting for controls to mature before testing them, auditors are encouraged to help shape those controls as they’re being built.
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