Audit 4.0-Based ESG Assurance : An Example of Using Satellite Images on GHG Emissions

Environment, Social, and Governance (ESG) information has become an essential global resource for investors. Regulators have attempted to standardize their reporting process and assure its quality but have obtained mixed results. While more companies offer ESG disclosure, it is usually not fully substantiated with supporting information. Assurance verifying that metrics on ESG reports are free of substantive errors is needed. However, fundamental aspects of ESG assurance procedures, such as how to exercise professional skepticism, are still not formalized. Based on Big Data and the proposed emerging technologies of Audit 4.0, this study presents an innovative method to improve ESG assurance and enable timely and accurate auditing. A case study explores the integration of satellite-based methane estimation as ESG audit evidence and the use of a continuous assurance dashboard to reduce the risk of greenwashing. The use of satellite images provides opportunities for regulators and companies to continuously monitor and assure ESG reports