The Role of Internal Audit in ESG Governance: A Conceptual Framework

Environmental, social, and governance (ESG) governance has emerged as a critical component of corporate sustainability, requiring organizations to adopt transparent and accountable practices. Internal audit, traditionally focused on financial and compliance activities, is now expected to play a strategic role in ESG oversight. This article proposes a conceptual framework that defines internal audit’s contribution to ESG governance through its core roles: assurance, risk assessment, and advisory services. The framework highlights how these roles influence governance outcomes by enhancing ESG risk management and improving the quality of sustainability reporting, which act as mediating mechanisms. Additionally, it incorporates moderating factors such as board oversight and regulatory pressure that shape the strength of these relationships. By integrating governance theories—Agency, Stakeholder, and Institutional—the study advances theoretical understanding while offering practical guidance for boards, audit committees, and practitioners. The findings emphasize the internal audit’s transition from a compliance-driven function to a strategic partner in achieving ESG objectives. This work provides a foundation for future empirical research and offers actionable insights for organizations seeking to enhance accountability, transparency, and long-term sustainability through effective ESG governance.