The expanding role of the CSO in ESG oversight, auditing and governance

As ESG performance becomes a defining factor in how companies are evaluated by investors, regulators and the public, the role of the Chief Sustainability Officer (CSO) has evolved into a strategic leadership position. Far from being a communications or compliance role, the CSO now plays a central part in embedding ESG and sustainability principles into the core of corporate governance and decision-making processes.

Among the most critical responsibilities now falling under the CSO’s remit are oversight, auditing and verification of sustainability performance – and ensuring these activities are understood and supported at the highest levels of the organisation, including the board of directors.

This article explores how CSOs are leading corporate sustainability and ESG governance, establishing robust frameworks for accountability and ensuring that environmental and social objectives are treated with the same rigor as financial goals.

The strategic importance of ESG oversight

ESG is no longer an optional framework or a PR-driven initiative – it is a comprehensive lens through which long-term corporate health is assessed. Investors are increasingly linking ESG performance to risk mitigation, resilience and value creation. Regulatory bodies across the globe are moving towards mandatory ESG disclosures and climate risk reporting, while stakeholder expectations continue to rise.

In this context, the CSO is often the executive responsible for creating a structured approach to ESG oversight that includes:

• identifying and prioritising material ESG risks and opportunities

• establishing governance mechanisms for ESG topics

• ensuring accurate data collection and third-party verification

• communicating performance transparently to stakeholders

• aligning ESG strategies with corporate purpose and values.

Building effective ESG and sustainability oversight

To fulfill their role effectively, the CSO must design systems that ensure sustainability is embedded into operational, strategic and governance frameworks. This involves cross-functional coordination, board engagement and rigorous data management.

1. Establishing ESG governance structures

One of the CSO’s first priorities is to institutionalise ESG oversight through defined roles, responsibilities and reporting lines. This may involve:

• forming an ESG steering committee with leaders from key departments (legal, compliance, finance, HR, operations)

• creating working groups to address specific topics (e.g., climate strategy, DEI, ethical sourcing)

• designating executive sponsors for key sustainability goals.

The CSO must ensure there is clarity on who is responsible for ESG issues across the company – and that mechanisms exist to escalate risks, track progress and make decisions.

2. Board-level engagement and accountability

For ESG oversight to be effective, it must extend to the board of directors. The CSO plays a pivotal role in ensuring that board members are informed, engaged and equipped to oversee ESG strategy.

This includes:

• providing regular ESG briefings and training sessions for board members

• collaborating with the board or relevant subcommittees (e.g., audit, risk or sustainability committees)

• ensuring the board reviews ESG targets, risk disclosures and performance metrics

• aligning ESG performance with executive compensation or bonus structures.
The CSO may also work with the nominating committee to ensure board diversity and ESG expertise are considered during director appointments.

3. Materiality and risk assessment
A fundamental component of ESG oversight is understanding which sustainability issues are material to the company’s long-term success. The CSO typically leads materiality assessments to identify the most pressing environmental and social risks and opportunities.

This often involves:

• Stakeholder mapping and engagement (investors, customers, communities, regulators)

• Reviewing industry benchmarks and emerging regulatory trends

• Mapping ESG risks to enterprise risk management frameworks

• Aligning reporting with standards like SASB, TCFD, ISSB or GRI

CSOs must ensure that material topics are reflected in strategic planning and risk registers and that the company’s ESG focus areas are grounded in stakeholder expectations and business impact.

Sustainability auditing and verification

Oversight requires more than intention – it demands verifiable, accurate and trustworthy information. The CSO is responsible for ensuring that ESG data is subject to the same levels of scrutiny as financial data.

1. Developing ESG data governance frameworks

Robust data governance is essential to building trust in ESG disclosures. CSOs work with IT, finance and operational teams to:

• Define data collection protocols and internal controls

• Integrate ESG data into enterprise resource planning (ERP) systems

• Ensure consistency and comparability across reporting cycles and business units

Standardising definitions and methodologies (e.g., for calculating Scope 1, 2 and 3 emissions) helps ensure credibility and auditability.

2. Internal audits and assurance mechanisms

CSOs are increasingly collaborating with internal audit teams to include ESG metrics in internal reviews. This may involve:

• conducting sustainability-focused audits (e.g., energy efficiency, supplier ethics)

• testing the robustness of ESG reporting controls

• evaluating progress toward sustainability KPIs and targets.
By treating ESG goals as performance metrics subject to internal audits, the CSO raises the accountability of sustainability initiatives.

3. Third-party verification and reporting standards

To enhance transparency and build stakeholder confidence, the CSO must often secure external assurance on ESG data. This includes:

• engaging third-party auditors to verify emissions data, labor practices or sustainability reports

• publishing assurance statements alongside sustainability disclosures

• aligning reports with global standards such as GRI, CDP or the Task Force on Climate-related Financial Disclosures (TCFD).
Third-party verification not only enhances credibility but also helps prepare companies for incoming regulations that may require mandatory audits.

Strengthening ESG communication and disclosure

CSOs also play a lead role in ensuring transparent and consistent communication of ESG performance. This is essential to maintaining trust with stakeholders, particularly investors and regulators.

Key elements include:

• publishing annual sustainability or ESG reports

• integrating ESG data into financial filings (e.g., 10-Ks, annual reports)

• communicating progress toward science-based targets or net-zero goals

• responding to ESG ratings agencies and indices.

Effective communication requires clarity, balance and the ability to demonstrate both achievements and areas for improvement. CSOs help shape the narrative around sustainability while backing it up with data.

Conclusion

The modern CSO is not simply a sustainability advocate – they are a key architect of corporate governance in the age of ESG. Their oversight ensures that sustainability is woven into the fabric of the business, from boardroom strategy to operational execution.

By establishing rigorous ESG governance structures, enabling board-level engagement, overseeing audits and verification and ensuring transparent disclosure, CSOs create the foundation for resilient, ethical and future-ready organisations.

As ESG regulation tightens and stakeholder expectations continue to grow, the CSO's leadership in oversight and assurance will only become more critical. Companies that empower their CSOs to engage at the highest levels – while equipping them with the tools and authority to enforce accountability – will be best positioned to respond to the sustainability transition with integrity and success.