Electrolux is harnessing its internal audit department to ensure its sustainability information can stand up to the requirements of the ESRS and the scrutiny of external assurance, senior sustainability analytics and reporting manager Jan Johansson told delegates at the Corporate Disclosures 2024 Conference held in London in November.
The Swedish home appliance manufacturer has disclosed sustainability-related information using the GRI standards since the early 2000s, and went a step further by obtaining limited assurance from 2011 onwards. As a large, EU-based undertaking, it will have to issue its first CSRD-compliant report in 2026 based on its 2025 data.
Johansson explained that the company's internal audit department has supported these reporting efforts for the last few years, which has involved a significant level of engagement.
"I don't know, how many hours I sat with internal controls people trying to get them to understand how this actually works because it is quite complex, and there are a lot of a lot of data sources in different ways, shapes and forms across the board which complicates things even further," he said.
Ahead of its annual external assurance engagements, the internal audit team assesses the materiality judgements sustainability reporting process and highlights areas that require improvement.
Johansson advised that other companies scoped into the CSRD engagements start this engagement with their internal audit teams as soon as possible, as it can prove to be "an uphill battle".
"What we're trying to set up now is more internal controls for supporting them, or to be totally transparent, for bringing down the fee of our external accountants or external auditors," he added.
The move from limited to reasonable assurance was highlighted as a something which will require companies to ensure they have reliable and robust data processes across the board, and the engagement with internal audit has highlighted some areas that require attention at the Swedish company.
In particular, as a company with operations in multiple jurisdictions, Electrolux has to manage different systems for monitoring its energy usage at its different factories around the world, and inputting the data from these locations into one set of controls within the company is problematic.
As a benefit of the engagement with internal audit, Johansson highlighted the "realisation that this is not going to be straightforward", and that investing as a company into streamlined software is required.
He revealed that the audit committee has been heavily involved in the double materiality assessment, in particular by outlining the high-level sustainability considerations for the company which the sustainability team builds on with the practical considerations of reporting on the various topics.
As a manufacturing company, which Johansson said is often "extremely results-driven" rather than guided by process, this engagement with the audit committee has helped it to move towards a more robust governance structure over the sustainability reporting process. He said there is now more emphasis on how the company has generated its sustainability metrics.
