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COSO: Effective Internal Control Over Sustainability Reporting

Last March 30 the Committee of Sponsoring Organizations of the Treadway Commission (COSO) released a study with supplemental guidance for organizations to achieve effective internal control over sustainability reporting (ICSR), using the globally recognized COSO Internal Control-Integrated Framework (ICIF).


Formed in 1985, COSO is a voluntary private sector organization dedicated to helping organizations to enhance internal control, risk management, governance and fraud deterrence. A key referece to auditors and risk managers.


In 2002, it became a reference framework of the Sarbanes-Oxley Act (SOX). A key element was section 404, that requires CEO and CFO to jointly signoff an yearly statement, indicating that the organization 1) has internal controls over financial reporting and 2) it works without significant deficiencies or material weaknesses.


Back to this new COSO study, each of the 17 principles in ICIF-2013 is explained and interpreted for application to sustainability. Benefits include:

  • Alignment of an organization’s employees, partners, and stakeholders with its commitment to purpose and articulated objectives

  • Enhanced data quality, utility, comparability, and reliability

  • Strengthened ability to support operations and compliance objectives

  • Better-informed decision making by internal management, external investors, and other stakeholders

  • Enhanced understanding of risks and the ability to mitigate them

  • Greater overall market efficiency

  • Increased access to and lowered cost of capital


These benefits are most likely to accrue to organizations that have aligned their sustainable business objectives with their business strategies and focused on the issues that contribute to performance and value preservation and creation.


Click at the image below to download “Achieving Effective Internal Control over Sustainability Reporting (ICSR): Building Trust and Confidence through the COSO Internal Control―Integrated Framework”, including COSO Cube evolution, 3 dimensions, intangible assets and market value, interested parties, IFRS FOUNDATION / IASB / ISSB (VRF, CDSB, IIRC, SASB) / AICPA,ESG topics & incentives, Sustainability Reporting & atributes, CEO Letters, Emissions & GHG Protocol, lines of defense & fraud, double (and dynamic) materiality, and several cases, "points in focus" and insights. Knowledge sharing, sources and "Top 10 Takeaways" (on page 105)


COSO is jointly sponsored by AAA, AICPA, FEI, IMA and IIA. #sustainability





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“Nothing in life is to be feared, it is only to be understood. Now is the time to understand more, so that we may fear less.”

“I am among those who think that science has great beauty”

Madame Marie Curie (1867 - 1934) Chemist & physicist. French, born Polish.

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