COSO and WBCSD Propose Guidance on ESG Risks

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the World Business Council for Sustainable Development (WBCSD) have released a draft of proposed guidance, Applying Enterprise Risk Management to Environmental, Social and Governance-Related Risks (Draft Guidance). The comment deadline is June 30, 2018.

The existing COSO framework, Enterprise Risk Management — Integrating with Strategy and Performance, is an applied enterprise risk management frameworks (ERM). The goal of the COSO ERM Framework is to help organizations create, preserve, sustain and realize value while improving their approach to managing risk.

The purpose of the Draft Guidance, if adopted in its current form, is designed to help organizations respond to the increasing prevalence and severity of Environmental, Social and Governance (ESG)-related risks, ranging from extreme weather events to product safety recalls.

What the ESG Guidance Proposes

The Draft Guidance includes:

  • The evolving global risk landscape;
  • Common ESG issues and related risks and opportunities impacting business;
  • Examples of risk events and consequences of failure to manage them;
  • Principles of the COSO ERM Framework;
  • Methods to overcome ESG-related risk challenges, including identifying and assessing the severity of risks with uncertain financial consequences; and
  • Innovative responses for addressing ESG-related risks and seizing opportunities.

The COSO press release on this matter is available at:

The Draft Guidance is available on CCH Accounting Research Manager at:


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