Why Auditors Should Embrace ekoIntelligence for Enhanced ESG Compliance

Navigating Global Greenwashing Regulations

As environmental, social, and governance (ESG) concerns gain importance across corporate sectors, regulations around ESG disclosures are tightening globally. Both the EU and the UK have introduced stringent regulations to address ‘greenwashing’—the situation where companies exaggerate, do not substantiate or fabricate their environmental initiatives for favourable public perception.

Although aligned in their aim to promote transparency and accountability, the regulations in different jurisdictions impose different requirements, similar but different, creating a minefield of complexity for companies with cross-border activities. The EU’s Sustainable Finance Disclosure Regulation (SFDR) mandates specific, evidence-based disclosures from financial institutions, while the UK’s Financial Conduct Authority (FCA) requires that all sectors ensure sustainability claims are “clear, fair, and not misleading”.

Both frameworks demand that companies substantiate claims with credible data, creating significant compliance challenges for firms operating across borders, and challenges heightened by the fact that non-compliance can result in enforcement actions, fines, or civil claims, leading to substantial reputational and financial risks for firms and - always one that ensures increased attention - their directors.

Call in the Auditors

Under these new regulations, auditors have a crucial role to play in ensuring ESG claims are accurate, transparent and comply with these evolving standards.

​PwC’s Marc Lehmann emphasises: “However, disclosing this information is just one side of the story. Even more important is to ensure that statements made are consistent with the firm’s business practices. Failing to do so bears the risk of being called out as greenwashing your business – a huge reputational risk that should not be underestimated in times where customers expect companies to play their part in creating a sustainable world.”

The Evolving Role of Auditors in ESG Compliance

As the front line in preventing greenwashing, auditors play an essential role in ensuring that companies’ ESG reports are transparent, accurate, and compliant. Under new regulations, auditors work closely with clients to verify that all sustainability claims are backed by solid data, and to assess adherence to industry standards and regulatory requirements. This growing responsibility now extends beyond traditional financial metrics to include specific, measurable ESG factors. Discharging this responsibility requires robust tools to analyse diverse data sources, from public reports to confidential company information.

Comprehensive ESG Audits: Ensuring Depth, Accuracy, and Effective Compliance

Effective ESG audits demand reports that go beyond surface-level assessments, providing detailed, evidence-based data. Companies must create comprehensive reports that identify inconsistencies, suggest improvements, and thoroughly document numerous operational areas like employment practices, carbon emissions, supply chain integrity, and governance. A well-executed audit ensures that a company’s claims are substantiated by objective information and data, aligning with both EU and UK standards to avoid penalties for corporate and personal non-compliance.

It is clear, therefore, that auditors need reliable tools to ensure client disclosures are backed by objective data, aligning with both EU and UK standards to avoid penalties.

Enter ekoIntelligence, the innovative platform, which supports this need by offering powerful capabilities for conducting precise, in-depth audits.

Introducing ekoIntelligence: Reliable ESG Data and Verification

ekoIntelligence is what we call a ‘hybrid AI-driven with human-in-the-loop’ platform which aggregates, verifies, and analyses huge amounts of sustainability data. By integrating public sources, such as regulatory reports and peer-reviewed research, with secure, privately held data, ekoIntelligence provides auditors with a comprehensive, dynamic ESG profile. This allows auditors to validate claims thoroughly, efficiently and effectively, using an easy-to-use, customisable and streamlined tool which aligns with regulatory expectations.

Key Benefits of ekoIntelligence for Auditors

ekoIntelligence offers a suite of features designed specifically to support auditors:

Supporting Ongoing Compliance with Up-to-Date Data

One of ekoIntelligence’s most valuable features is its capacity to support ongoing compliance processes. Auditors often revisit client ESG reports to reflect updated regulations or new company initiatives. ekoIntelligence simplifies this by continuously collecting and analysing current data, ensuring that all compliance efforts remain up to date. The platform’s capability to monitor public data and also include and integrate private information into its universe means that auditors can access the most comprehensive and current dataset available for ESG assessments and areas not covered are disclosed. This approach enhances the integrity of each report, reducing the risk of greenwashing allegations and increasing client trust.

The Private Data Portal for In-Depth Analysis

In addition to public data, ekoIntelligence will include a secure portal for uploading private data, allowing companies to share confidential information directly with their auditors, such as proprietary processes, resource usage, or internal emissions data. By incorporating private data, auditors can conduct a more nuanced assessment, ensuring that all facets of a company's ESG efforts are represented. This combination of public and private data strengthens report accuracy and helps auditors develop actionable insights for their clients.

Conclusion: A Strategic Tool for Effective ESG Compliance

In today’s regulatory environment, auditors need robust tools to ensure the accuracy, efficiency and effectiveness of ESG assessments. ekoIntelligence provides a data-driven, compliance-oriented platform that enables auditors to do just that - delivering reliable, transparent analyses trusted by clients and regulatory bodies alike. By adopting ekoIntelligence, auditors not only improve their ESG audit processes but also add strategic value for clients seeking credible sustainability insights and compliance across international standards.