Google’s ESG controller forges new paths

As companies face increased demands for ESG transparency from stakeholders, and move from voluntary to mandatory reporting of ESG data, some have created a new role in response: the ESG controller. The person who sits in this role works closely with finance and sustainability to coordinate the collection and reporting of ESG data, ensuring that it’s investor-grade.

Google’s parent company Alphabet has embraced the role. In 2020, the company made public commitments to sustainability and carbon neutrality. An important part of that commitment is providing clear information about the company’s environmental impacts and goals.

CFO Brew spoke with Daniel Lim, Google’s ESG controller via email to better understand Alphabet’s ESG strategy, and how the company is managing ESG information and disclosure.

This interview has been lightly edited for length and clarity.

What’s a typical day on the job like for you?

There isn’t a typical day for me. Though after 18 months into the role, I’d say that what I do on a daily basis revolves around bridging the gap between current—and future—state reporting and bringing the experience and diligence that the company has developed around financial information to non-financial information…

Part of my role is to work closely with our sustainability team and other cross-functional teams (such as legal, finance, investor relations, policy, and others) to ensure that reporting is of the highest quality, and enhance our reporting and disclosure review systems as we continue to focus on high-quality data and information.

When I first started on this journey, my role was largely focused on preparing for upcoming global ESG disclosure rules and how do we ensure this non-financial information is subject to a level of rigor that we would expect of financial information...Today, you will find that the role of an ESG controller has evolved to serving as a center of expertise in bringing financial accounting, reporting, and controls experience and combining it with environmental sustainability knowledge to support the voluntary reporting and all of the work led by sustainability teams.

What’s been the most challenging aspect of your job so far?

Building governance structures to establish clear cross-functional roles and responsibilities that all teams feel vested in and good about takes trust—trust that the outcome will be better reporting, better external engagement, and further enablement of progress against our goals.

We also have to remind folks that this is a journey!...Change management [around] how we think about data and reporting is a journey. That’s okay. What’s important is establishing norms and standards…and being willing to have it evolve.

What’s been the most rewarding aspect?

Getting to build something new with a team in a rapidly evolving space…This cross-disciplinary environment has ample opportunities to establish best practices...We get to figure out what makes the most sense and shape things.

How closely do ESG controllers work with CFOs and finance teams?

As an ESG controller, I help connect finance with various cross-functional teams to bridge non-financial information with financial information…The integration of non-financial sustainability information like greenhouse gas emissions in carbon tonnes, electricity in kilowatts, water, etc. and traditional financial metrics and measures like revenues and operating costs is key to decision-making.

What skills do you need to thrive as an ESG controller?

Fostering collaboration and alignment across teams. While someone that can bring the same rigor and diligence seen in financial reporting to the ESG reporting space is important, none of that works if you don’t know how to collaborate, build trust and strong partnerships, and innovate on how to bring those past experiences into a new space.

[The] ability to bring clarity on what’s most important, right now…The landscape is rapidly evolving, and because there is a bit of wait-and-see for some of the global reporting rules to become final, you have to be able prioritize and reprioritize appropriately, take a look at the regulatory reporting landscape, but also other needs internally and externally, [and] look for common denominators and start there…

The space is dynamic, you should be too. You will need to be able to think outside the box and rethink that box at times. This cross-disciplinary environment has no real established best practices yet. You get to figure out what makes the most sense and shape things. Roll up your sleeves and lean into it.

Strong understanding of financial reporting, accounting, internal controls, and risk: Speed and quality of information is what your organization will need and what stakeholders expect, not just to meet upcoming regulatory requirements, but to make informed decisions to enable your sustainability strategy.