Publication Details
Abstract
Objective: This study aims to explore the integration of Environmental, Social, and Governance (ESG) factors into internal control mechanisms, specifically focusing on the development of sustainable controls within organizations. Method: The research adopts a qualitative approach, utilizing library (literature) research and qualitative content analysis with a thematic method. The analysis involves iterative and monotonous reading to ensure a comprehensive understanding of the documents reviewed. Results: The findings indicate that the Sustainable Control Concept Model (Stage 1) develops a system derived from traditional internal control, structured around ESG principles. ESG metrics are identified as critical operational control tools, with integration success depending on material selection, measurability (SMART), and alignment with performance management systems, such as the Balanced Scorecard. Additionally, governance reforms, particularly in the roles of the board and audit committees, are necessary for effective green and social accountability. Effective sustainability controls are linked to improved operational performance, enhanced reputation, and long-term value creation. Novelty: This study contributes a model that bridges the gap between qualitative ESG criteria and quantitative internal control systems, offering new insights into the role of internal audits in ensuring sustainability effectiveness.