Page 388 - Ebook HTKH 2024

The second pillar - social criteria covers many separate social aspects of ESG
which included in most social sustainability assessments summarized below.

Figure 2. Social key performance indicators
Human Capital Product Liability Stakeholder Social
Opposition Opportunities
Supply chain labor Product safety and Controversial Access to
standards. quality. sourcing. communications.
Health and safety. Financial product Access to finance.
Human capital safety. Access to

development Privacy and data healthcare.
Labor security. Opportunities in
management. Responsible health and
investment. nutrition.
Source: globalreporting.org

The third pillar - governance criteria is essentially about how a company is
managed by those in the top floor executive offices. The integrity of corporate
governance and structure and supporting the balance between responsible governance
and healthy profitability are most of the serious issues relating to governance that
attract the stakeholders’ attention as follows:
Figure 2. Governance key performance indicators
Corporate Governance Corporate Structure Operational Management

Board diversity. Business ethics. Risk and Crisis
Executive pay. Anti-competitive Management.
Ownership and control. practices. Supply Chain Management.
Accounting. Tax transparency. Data Privacy and Protection.
Financial system
instability.

Source: globalreporting.org
In essence, for an Internal Audit to provide value for companies and to fulfill its
role of compliance with ESG factors, it must consider both general and specific aspects
of each of these pillars through its integrated reporting (IR). The International Integrated
Reporting Council (IIRC) defines IR as a process that results in an organization’s
periodic integrated report about value creation over time and related communications

regarding aspects of value creation. COSO 2023 defined ESG for sustainable business
to refer to the nonfinancial information value chain and places an important
responsibility of internal audit in assessing and monitoring the performance of an
organization’s controls for sustainability. By comprehensive approach, an effective
internal audit function provides assurance related to controls over sustainable business
information and consults to help management design, implement, and support the

internal control to achieve ESG-related goals . ACSI (2015) set up a starting
175

175 IIA (2022), Internal audit’s role in Integrated Reporting Assurance
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