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Introduction: Analytics in Accounting and Auditing Read chapter Read first chapter

2023 | OriginalPaper | Chapter

12. Integrating ESG Risks into Control and Reporting: Evidence from Practice in Sweden

Authors : Jason Crawford, Fredrik Nilsson

Published in: Handbook of Big Data and Analytics in Accounting and Auditing

Publisher: Springer Nature Singapore

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Abstract

As transparency and accountability demands around Environmental, Social, and Governance (ESG) risk control and reporting increase, pressure is mounting on organizations to act as good corporate citizens. One avenue to meet these challenges is to integrate ESG risks into Enterprise Risk Management (ERM) in order to improve control and reporting. The aim of this chapter is to examine ESG risk integration by focusing on: (1) How ESG risk is integrated with control, i.e. incorporated into strategic and operational decision-making; and (2) How ESG is integrated into reporting, i.e. incorporated into financial and sustainability reports. Our analytical framework conceptualizes integration as a technical-social process, which has three integrating dimensions and five integrating components. We use a qualitative approach and conduct short case studies in four ESG leading Swedish organizations. The study finds that social processes are important in ESG integration and lead to increased integration on the cognitive dimension. Findings also show how technical processes support social processes, however the use of Artificial Intelligence (AI) in ESG risk management in the organizations is low, as is internal audits role in promoting ESG risk control effectiveness and reporting quality. As this is a nascent area that connects risk management, management control, and financial accounting concepts, future research should engage with leading organizations to better understand the relationships between these concepts to advance theoretical development and create practical insights useful for practitioners.

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previous chapter The Use of Internet of Things, Big Data Analytics and Artificial Intelligence for Attaining UN's SDGs
next chapter Digitalization and Management Control in the Public Sector: What is Next?
Footnotes
1
For further information on the Impact-Weighted Accounts Project use the following link: https://​www.​hbs.​edu/​impact-weighted-accounts/​Pages/​default.​aspx.
 
2
Neither LF nor LFGB uses the term “ESG” explicitly. Instead they use the term “Sustainability”. We will therefore use this term.
 
3
Gender equality; decent work and economic growth; industry, innovation and infrastructure; sustainable cities and communities; climate action; peace, justice and strong institutions.
 
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Metadata
Title
Integrating ESG Risks into Control and Reporting: Evidence from Practice in Sweden
Authors
Jason Crawford
Fredrik Nilsson
Copyright Year
2023
Publisher
Springer Nature Singapore
Book
Handbook of Big Data and Analytics in Accounting and Auditing

Print ISBN: 978-981-19-4459-8

Electronic ISBN: 978-981-19-4460-4

Copyright Year: 2023

DOI
https://doi.org/10.1007/978-981-19-4460-4_12