ESG controllers are here to stay: What you need to know

While the controller position dates back to the Industrial Revolution, the role became critical in the 20th century as businesses began to grow significantly and accounting standards and regulatory requirements became more prominent.  

Following a similar precedent, a position known as the “ESG controller” is taking off – with a responsibility to mature corporate environmental, social and governance (ESG) reporting procedures. As waves of non-financial reporting regulations surge, many companies see value in applying an accounting mindset to data streams that may lack robust oversight and are at risk of regulatory scrutiny.  

While hiring ESG controllers remains an early trend, corporate leaders have many questions about this role: How does this differ from a sustainability lead? When is the right time to hire an ESG controller? Is this a long-term need or a short-term solution?  

While it may be too early to answer these questions confidently, we can observe that this is a growing trend that companies of any size should prepare for, as with any emerging area of risk.  

Why is an ESG controller so critical? 

To date, Fortune 500 companies have been the early adopters in hiring ESG controllers. This makes sense, as the regulatory complexity of these multinational groups necessitates a controller skillset to complement the existing sustainability, legal and accounting functions. However, we also see smaller companies that are beginning to requisition this role. Reporting risks for inaccurate sustainability disclosures exist across markets, and the responsibility to comply with sustainability reporting regulations is a key gap in many organizations – particularly for publicly traded companies.  

The ESG controller position sits at the intersection of finance, legal and sustainability – three separate functions that must come together to help a business meet its sustainability regulatory requirements. 

Faced with a key position whose role requires a bit of a juggling act, companies need a leader who understands all three functions and can partner efficiently across teams to elevate sustainability reporting within the organization and paves the way for a smooth journey to compliance.  

More specifically, an ESG controller is responsible for developing the company’s reporting framework, guiding the flow of the reporting process and ensuring compliance with the same level of rigor that exists in any other reporting function within the company.