Posted: 15/03/2025
I recently attended a webinar on Sustainability Management and Reporting, jointly organized by the Ministry of Finance, MASM, ISO, IAF, ToC Association, and the Standards Department. It was insightful, especially in clarifying the complementary roles of ISO standards and ESG/impact-based reporting in sustainability.
Hereβs a summary of the key takeaways:
π Understanding the Two Approaches: ISO vs ESG (Impact-Based) Audits
β ISO Audits (Management System Focus)
- ISO standards (like ISO 14001, ISO 31000) are designed for non-financial performance audits based on structured management systems.
- These audits assess whether a management system is in place, functioning as intended, and being continually improved (based on the PDCA cycle).
- ISO audits are conformity assessments β they do not verify every single data point, but rely on process integrity and internal controls.
- Conducted by accredited certification bodies, ISO audits hold broad international recognition.
- These systems are foundational and help organizations embed sustainability principles into operations and strategy.
Examples include:
- Environmental Management (ISO 14001)
- Risk Management (ISO 31000)
- Occupational Health & Safety (ISO 45001)
- Contribution to SDGs (ISO/UNDP PAS 53002)
π ESG, SDG, and Impact-Based Audits (Results & Reporting Focus)
- These audits are based on performance outcomes reported by the organization β not just the systems behind them.
- Standards like GRI, IFRS Sustainability, SASB, TCFD, IR, etc., focus on measurable social, environmental, and economic impacts.
- Assurance and verification audits under this model validate whether the data presented in sustainability reports is accurate and complete.
- These audits are detail-heavy, often involving line-by-line checks, especially when tied to financial and regulatory disclosures.
- GRI, for instance, focuses on non-financial indicators, offering a robust framework for ESG assurance.
𧩠Why Both Matter β And Should Work Together
The key takeaway: You canβt measure and report well without a strong system.
Organizations need to build solid sustainability management systems first (ISO), then report measurable outcomes and impacts (ESG/GRI/etc.).
Without a clear internal process (plan-do-check-act), sustainability reports risk becoming incomplete or unreliable. On the other hand, if well-aligned, ISO and ESG audit models complement each other, enabling:
- π― Strategic alignment to sustainability goals
- π Measurable impact over time
- 𧩠Full-cycle integration: Plan β Implement β Monitor β Improve β Report
π Standards in Development: ISO & UNDP Collaboration
ISO, in collaboration with UNDP, is developing guidelines for sustainability management aligned with the SDGs.
One such framework, ISO/UNDP PAS 53002, helps organizations systematically contribute to the SDGs without missing key elements, guiding them toward more effective sustainable development practices.
π¬ Final Thoughts
If your organization aims to report on sustainability, make sure you first build a system that supports it.
Jumping directly to reporting without a foundational management framework can lead to doubtful, unverifiable claims β reducing credibility.
But with a systematic foundation in place, sustainability reporting becomes a powerful tool for long-term improvement and trust-building.
π‘ Bonus Note:
During the event, organizers encouraged Mongolian professionals and organizations to submit feedback and comments in Mongolian.
βDonβt hold back just because youβre not fluent in English,β they said β your insights are valuable. π²π³β¨
