As Environmental, Social, and Governance (ESG) factors take center stage in shaping corporate strategies, companies are reimagining how they manage ESG-related internal controls. One emerging approach is moving these controls into a Global Business Services (GBS) model - or setting them up in the GBS right from the beginning. Let us explore the potential benefits, challenges, and strategic advantages of tackling this challenge.

New Services in the GBS Portfolio for ESG
GBS, which has traditionally been a driving force in streamlining business functions such as HR, finance and IT, is now ready for further growth. As companies confront increasingly stringent ESG requirements, GBS can level up its offerings to include a broader range of services, including: 

• Value chain due diligence: Increasing emphasis on stakeholders management opens opportunities in areas where GBS has been present with the standardized and workflow-based procedures, including onboarding, review and assessment of business partners and suppliers, periodic detailed assessments/audits/reports
• ESG data collection and preparation for reporting: With GBS already managing large-scale data, integrating ESG metrics like emissions, carbon footprint, employees and diversity, as well as governance risk factors becomes a natural extension. Risk management and auditing support: GBS can support sustainability audits, validate data accuracy, and streamline the reporting process by working with internal audit teams to ensure ESG metrics align with risk management frameworks.

Better Quality, Standardization, and Control through GBS
Moving ESG controls to GBS promises improved standardization and quality across global operations. GBS offers:

• Consistency across geographies: Centralizing ESG controls in GBS ensures consistency in how data is collected, measured, and reported, which is especially important for international companies navigating different regional regulations.
• Enhanced data accuracy and transparency: GBS can implement automated tools for ESG data collection and validation, reducing the risk of human error and improving overall governance .
• Stronger internal controls: By using common frameworks and its experience in controls over other reporting processes, GBS ensures that ESG processes are integrated into existing control environments, enhancing operational effectiveness and aligning ESG with business objectives.

Challenges in Transitioning ESG Controls to GBS (or setting them up in GBS)
While the potential benefits are significant, companies must also consider the following challenges:

• Integration complexity: Incorporating ESG into GBS requires adapting diverse data systems and ensuring that legacy systems can handle the new volume and complexity of ESG data.
• Regional compliance differences: GBS teams must navigate varied regional ESG standards, which may require additional resources to ensure compliance with local standards.
• Change management: Shifting ESG responsibilities to GBS will require a cultural shift within the organization. This includes training GBS staff on ESG issues and fostering cross-departmental collaboration between sustainability teams, risk management, and internal audit .
• Immaturity of ESG reporting and controls: while CSR / ESG reporting has been with us for some time, the processes that lie behind may have been rather spontaneous and informal, which means they need to be formalized and defined from the scratch.

Best Practices for Implementing ESG Controls in GBS
To ensure a successful transition, companies can adopt several best practices to fit it into an entire ESG data collection and reporting framework, where various teams (local and corporate) have been involved in the course of CSR and ESG frameworks and requirements development:

• Conduct a gap analysis: Assess the current state of ESG processes to identify areas where controls can be improved. This will help in designing a robust internal control framework for ESG
• Leverage existing control frameworks: Building on established frameworks like COSO allows companies to integrate ESG into their current risk management and reporting systems without starting from scratch .
• Engage stakeholders early: Collaboration between departments such as legal, sustainability, and finance is crucial for aligning ESG goals across the organization .

Long-Term Strategic Advantages
Implementing a GBS model for ESG controls can bring long-term strategic benefits:

• Scalability: As ESG reporting requirements evolve, GBS can easily scale operations to manage increasing data and compliance needs across global markets.
• Increased stakeholder trust: Centralized and standardized ESG reporting through GBS enhances transparency, which can boost trust among investors, regulators, and customers.
• Cost-efficiency: Over time, the automation and standardization through GBS can reduce the costs associated with ESG reporting and compliance, freeing up resources for other sustainability initiatives.

Strategic Considerations for Transitioning ESG to GBS
For organizations considering this transition, several strategic steps can ensure success:

• Conduct a Readiness Assessment: Assess the current capabilities of your GBS units and determine their ability to handle ESG tasks. This includes evaluating technological infrastructure and staff expertise.
• Define Clear ESG Objectives: Establish specific, measurable ESG goals that align with broader business objectives. These should guide the integration of ESG into GBS.
• Invest in ESG Talent: Hire or train individuals with expertise in ESG to manage the integration process effectively within the GBS structure.
• Leverage Technology: Utilize advanced data management tools, AI, and automation to streamline ESG reporting and ensure compliance.

Conclusion 

"ESG compliance advisory may become an important specialization for the business services sector in Poland, driven by rising legal requirements and a focus on corporate social responsibility. Poland is well-positioned to capitalize on this shift, with a strong movement toward highly specialized services in sustainability and governance. Our business services centers stand to benefit from this growth, leveraging the expertise of analytical professionals to support these evolving needs," says Agnieszka Orłowska, Vice-President of ABSL, ESG.

As ESG becomes a central focus for companies around the world, the opportunity to transition ESG data collection and reporting processes, as well as related internal controls to GBS offers a strategic way to enhance efficiency, transparency, and scalability. By leveraging GBS’s centralized structure, companies can streamline ESG processes and improve compliance while also driving sustainability goals. However, success in this transition will require careful planning, investment in technology, and alignment between global and local teams. This shift not only represents an opportunity to operationalize ESG more effectively but also positions companies to meet growing demands from investors, regulators, and consumers for greater accountability in environmental, social, and governance practices.

More about PwC Poland solutions for Global Business Services here.

Agnieszka Dujka – Director, PwC Polska

Julia Busz - Manager, PwC Polska