Workday, Workiva, Baker Hughes: ESG Audit Compliance

Sustainability narratives are getting more specific.

Corporate reporting has undergone a transition in recent years, from more qualitative narratives around green initiatives to financial-grade accounting.

With the introduction of requirements and guidance like the European Union’s Corporate Sustainability Directive and California’s SB 253, organisations often have to treat non-financial measures with the same precision as financial reporting.

Voluntary climate commitments, standalone sustainability reports and unverified claims are no longer enough to satisfy global regulators, debt issuers or institutional investors.

Instead, companies need to ensure they produce standardised disclosures that can be backed by double materiality assessments and verified evidence. 

Organisations that don’t comply with these requirements can expose board directors and corporate officers to regulatory enforcement, or even statutory fines and litigation risks.

CFOs themselves are often having to take primary ownership of ESG metrics and embedding them into financial reporting architecture. 

Establishing internal controls

To achieve audit readiness, many finance departments are establishing internal controls on sustainability reporting, structured directly on regulated compliance frameworks – with research from Deloitte research ‘The financial services industry’s answer to ESG regulations and stakeholder demands’ finding that 38% of financial services executives report that they are integrating ESG into existing Sarbanes-Oxley control environments.

But a historical reliance on decentralised spreadsheets, estimated figures and informal operational inputs represents a significant vulnerability for finance leaders. In fact, PwC’s Global CSRD Survey from 2024 found that 74% of companies previously said they relied on manual spreadsheets to manage sustainability information – compared to just 27% who said they used a dedicated sustainability management software. This introduces an elevated risk of human area, untracked modifications and unverified data entries. 

To manage these control gaps, many modern internal control environments enforce a strict separation of automated data validation routines and systematic line-item traceability across Scope 1, Scope 2 and Scope 3 emission metrics. 

By bringing carbon accounting directly into response planning software, financial leaders can make sure that every reported metric is able to match up with primary source documentation – such as utility invoices, meter readings and verified supplier disclosures – offering up an uninterrupted audit trail for external auditors, from raw data to final disclosures. 

Improving audit confidence

When finance teams are preparing for a statutory audit, they need to be able to navigate the structural progression from limited assurance, a moderate level or confidence with a negative-from conclusion, to reasonable assurance, or high levels of confidence through extensive testing and positive-form opinion.

Many organisations are also progressing their rate of ESG Maturity – how deeply a company embeds ESG factors into its core business strategy – but not as fast as many would like.

In fact, according to KPMG’s 2025 ESG Assurance Maturity Index, 76% of companies remain in the early or mid stages of ESG maturity – but the same research found that 60% of firms adopting ESG assurance expect greater market share, while 54% predict improved profitability. 

Initial regulatory phases begin with limited assurance – where independent auditors perform high-level analytical reviews and management inquiries to issue negative assurance statements that confirm that no incorrect statements have been identified. 

But as reporting standards increase – with national regulators soon having the independent authority to mandate reasonable assurance – auditors will need to perform rigorous operational verification.

Reasonable assurance asks external auditors to evaluate internal control operating effectiveness, perform on site verification and conduct extensive testing on datasets. 

And this higher-level reporting comes with a high-level price tag.

A few years ago, the Centre for European Policy Studies’s 2022 ‘Cost-Benefit Analysis of the First Set of Draft European Sustainability Reporting Standards’ reported that annual audit costs per firm were projected to jump from €108,000 – €162,000 (US$125,696 – US$188,545) under limited assurance to €246,000 – €394,000 (US$286,309 – US$458,560) when obtaining reasonable assurance.

Because of this, finance leaders should build strong data and control systems today to avoid expensive retrofits later to stay permanently ready for audits.

Workday - Unity

Workday has prioritised ESG audit readiness by modernising its internal financial data stack, bringing together both financial and non-financial data into a unified reporting and planning dashboards. 

By standardising data workflows and adding in real-time automated controls, Workday is able to make sure that its workforce, energy and operational compliance disclosures are fully traceable and audit-ready for third-party assurance.

“Accurate data is helping us become more efficient and make better decisions across the business,” Zane Rowe, Chief Financial Officer of Workday, previously told CFO.com.

“For instance, we now have far better insight into what our teams are working on, how our customers are using our product and how we can think about the future – like future demand. 

“And we’re elevating all of those decisions to a level where you can make truly informed, data-based, data-oriented choices rather than just estimating like some CFOs might have done previously.”

Baker Hughes - Transformation

In order to establish audit-ready sustainability metrics, in 2021 Baker Hughes overhauled its reporting infrastructure, introducing non-financial metrics into its core financial systems. This replaced more fragmented collection methods with stronger data governance, helping the company better understand and report on sustainability data. 

“By making our operations more sustainable, we're able to increase efficiencies that impact our bottom line. It’s a direct cause-and-effect relationship,” said Allyson Anderson Book, CSO at Baker Hughes.

“As we continue to enhance our sustainability efforts and move forward with climate disclosures and sustainability reporting, we believe our investor-grade integrated ESG data and reporting demonstrates our long-term, transparent approach to our investors.” 

This change has helped the company see a 36.9% absolute emissions reduction in scope one and two greenhouse gas emissions compared to its 2019 baseline – its largest emissions reduction to date – with Baker Hughes reporting that the use of renewable energy and operational efficiencies contributed to a 49% reduction in combined scope one and two facility emissions.

Workiva - Facilitator

To solve data fragmentation across corporate disclosures, Workiva has unified financial and sustainability reporting onto a single, controlled cloud environment. 

With the company embedding automated audit trials, tagging tools and real-time version control, the company is looking to simplify how financial and sustainability leaders can manage non-financial metrics within its platform.

“CEOs are making choices today that will shape their business for years to come,” said Julie Iskow, CEO of Workiva.

“Assured financial and sustainability reporting is not simply a compliance play, it's a strategic approach to mitigate risk, fuel performance and strengthen investor confidence.”

In order to support expanding global sustainability reporting mandates, the company invested more than 20% of revenue into research and development, releasing 15 sustainability-focused platform capabilities over the course of 2025. 

“In today’s high-scrutiny, high-uncertainty environment, trust cannot be left to chance,” said Julie.

“What companies disclose, how they manage risk and the quality of the data behind their decisions shape both performance and credibility.

“At Workiva, we believe trust is built on connected, controlled data. That belief shapes how we build our platform and operate our business.”