ESG checklist
Why it matters and how
to achieve ESG compliance
through a board portal
Content
What is an ESG compliance checklist? 3
Why use an ESG compliance checklist? 4
How to use an ESG compliance checklist? 5
1. Environmental compliance 7
2. Social responsibility 9
3. Governance and ethics 10
4. Stakeholder engagement 11
5. Data and reporting 12
6. Supply chain management 13
7. Risk management 14
8. Continuous improvement 15
9. Internal training and awareness 16
10. Compliance monitoring and auditing 17
2
What is an ESG
compliance checklist?
An ESG compliance checklist is an ESG preparedness and auditing tool
to check how companies comply with environmental, social, and
governance regulations. Companies use checklists to identify and track
ESG issues and evaluate progress toward ESG compliance reporting.
Once active, the new Corporate Sustainability Reporting Directive
(CSRD) will require companies to report on ESG issues starting from
the 2024 fiscal year. As a result, nearly 50,000 EU companies will be
subject to mandatory ESG reporting.
According to Bloomberg, the International Sustainability Standards
Board (ISSB) will impose new ESG reporting standards and mandatory
ESG reporting in 2024.
Additionally, the Securities and Exchange Commission also proposed
new ESG disclosure rules.
SEC requires U.S. companies with over $700 million public float to
disclose ESG risks and GHG emissions as early as 2023.
Therefore, it is advisable for companies to conduct comprehensive
internal audits in advance to prepare for new ESG regulations.
Adopting structured approaches, such as ESG compliance checklists,
can enhance ESG preparedness.
3
Why use an ESG
compliance checklist?
ESG checklist is a standard business practice recommended by leading
consulting firms, including Deloitte, EY, KPMG, and PwC. It delivers the
following benefits:
Structured auditing
ESG checklists help auditors clarify the scope of audits, outline business
functions under investigation, and track audit progress.
Time-saving
Checklists help businesses prioritize data collection during ESG audits
and save time by channeling efforts strategically.
ESG benchmarking
ESG checklists help businesses standardize ESG procedures and
benchmark business performance against ESG standards.
4
How to use an ESG
compliance checklist?
Auditors may apply checklists throughout different audit phases. Here
are examples of ESG checklists used in ESG audits.
Scope & Define ESG audit objectives and timeline
assessment Outline ESG frameworks and standards
to work wit
List business functions under the scope
of your ESG audit
Analysis Identify compliant and non-compliant
business area
Map the materiality of ESG risk
Outline controls for activities that manage
ESG risks under the audit objective
Monitoring Compare business functions against
ESG KPI
Identify business functions that
diverge from ESG benchmark
Track ESG issues
5
Data Map ESG-related shareholder need
collection List ESG-related documents evaluate
Record ESG issues within business
functions
Remediation Map ESG risk mitigation activitie
Track ESG management implementatio
Record achievements and milestones
toward ESG audit goals
6
1. Environmental compliance
Climate change
Track, control, and optimize energy consumption
Track and reduce carbon emissions
Establish climate change and carbon footprint reduction practices
Engage in climate advocacy initiatives
Minimize the impact of the supply chain on climate change
Environmental opportunities and compliance
Obtain all the necessary environmental permits
Establish sustainable resource consumption policies
Seize renewable energy opportunities
Develop environmentally friendly alternatives to current technology
7
Natural resources
Optimize land use and minimize local biodiversity impact
Monitor and optimize water usage and reduce stress on
local water supplies
Monitor and optimize the environmental impact of raw
material sourcing
Waste and pollution
Establish efficient waste control and recycling practices
Monitor and minimize waste generation
Manage supply-chain waste generation
8
2. Social responsibility
Human resources
Ensure robust health & safety practices
Establish fair labor management standards
Implement labor diversity and inclusion approaches
Follow pay equity practices
Ensure human rights development in the supply chains
Follow industry-leading employee well-being practices
Products and services responsibility
Implement reliable product safety and quality assurance control
systems
Apply robust privacy and data security measures
Ensure your products and services align with social safety practices
9
Community development
Provide social opportunities: health and nutrition, finance, communication
Evaluate the business impact on local communities
Engage in philanthropic activities
Participate in social responsibility initiatives
Stakeholder engagement
Establish regular stakeholder communications
Establish reliable materiality assessment practices
Address and eliminate controversial sourcing practices
3. Governance and ethics
Business ethics
Adopt and implement the code of ethics
Detect and address conflict of interest
Establish strict anti-bribery practices
Ensure tax transparency
10
Corporate governance
Separate executive management from the board of directors
and ensure board independence
Promote equity and diversity within the board
Approach board succession planning strategically
Ensure executive compensation transparency
4. Stakeholder engagement
Stakeholder impact
Evaluate stakeholder engagement efficiency
Assess the business impact of stakeholder engagement
Ensure stakeholder engagement in sustainability reporting
Stakeholder rights
Develop stakeholder rights protection frameworks
Address stakeholder interests, needs, and concerns
11
5. Data and reporting
Collection and management
Collect and analyze ESG data and performance metrics
systematically
Implement quality control of ESG data and establish data
management protocols
Ensure data transparency and disclose ESG data regularly
Involve external data evaluations
Reporting
Ensure systemic and scheduled ESG reports
Ensure ESG reporting complies with CDSB, Sustainalytics, GRI,
CDP, and other ESG frameworks
Integrate ESG reporting into the overall business strategy
12
6. Supply chain management
ESG compliance
Asses ESG compliance of suppliers, vendors, and partners
Ensure suppliers comply with responsible sourcing standards
Engage in ESG-compliant vendor management programs
Supplier communications
Address ESG risks and co-develop ESG risk mitigation strategies
Engage with suppliers on ESG issues and promote ESG compliance
Pursue continuous improvement in supply chains
13
7. Risk management
Risk assessment
Build ESG compliance into risk mitigation frameworks
Evaluate and address ESG risk impact on business performance
and stakeholder interests
Continuously monitor ESG risks and equally prioritize risk
prevention and remediation
Risk mitigation
Develop reliable risk mitigation activities
Ensure accountability in risk mitigation
Evaluate risk mitigation efficiency
14
8. Continuous improvement
Continuous learning
Foster a culture of continuous learning and innovation
Engage in continuous employee training
Implement environmental awareness in the business culture
Continuous improvement
Make continuous improvement part of the business model
Adopt the Plan-Do-Check-Act cycle in the continuous
improvement framework
Set measurable ESG improvement goals
Involve stakeholders in the continuous improvement activities
Adopt the five lean management principles
15
9. Internal training and awareness
ESG awareness
Engrave sustainability and responsibility in the business culture
Promote ESG awareness throughout human resources systems
Workplace training
Provide ESG training
Provide job-specific training
Provide diversity, inclusion, and work ethics training
Provide cybersecurity training
Provide health and safety training
16
10. Compliance monitoring
and auditing
Monitoring and auditing
Build ESG reporting frameworks and ESG compliance
monitoring into your business model
Stay updated on the ESG regulations on the local, national, and
international levels
Adopt whistleblowing mechanisms to timely report ESG issues
Conduct regular internal ESG audits and involve third-party auditors
Corrective actions
Implement corrective action plans and assign execution to
dedicated ESG teams
Conduct follow-up assessments and polish ESG compliance
processes
Monitor ESG compliance regularly and implement risk prevention
activities
17
How board management
software facilitates ESG
compliance
The best way to implement ESG frameworks is to use board
management software such as board portals. A board portal is a
security-first corporate governance platform designed to
improve decision-making on the board of directors.
Corporate and nonprofit boards can significantly improve ESG
compliance activities with iDeals Board:
Centralize ESG-related data
Store ESG reports, ESG compliance checklists, meeting minutes, and
board packs in a centralized file repository. Login into the workspace and
access necessary ESG data at any time.
Manage ESG meetings
Create intuitive digital agendas with attachments, comments, and
meeting minutes and organize board meetings using a built-in meeting
planner.
18
Collaborate on ESG matters
Approve decisions using e-signature; discuss ESG matters and assign ESG
issues to responsible teams using public comments in board books.
Publicly available comments allow for greater transparency and
accountability in progress tracking and decision-making.
Ensure top-notch data security
Have peace of mind with 256-bit data encryption at rest and in transit,
multi-factor authentication, digital rights management tools, and
granular access permissions.
Supervise ESG reporting
Generate drill-down reports based on ESG data. Analyze ESG reports,
cross-reference ESG data, and receive updates before, during, and
after board meetings.
19
It used to take an entire day for staff
to assemble board papers, whereas
with iDeals, it takes a maximum of 3
hours to put together and upload
the larger pack.
Nomcebo Marrengane
Assistant Tax Commissioner and Company Secretary, ERS
Independently rated as the best
VDR experience, for 4 years in a row
