Heads of Internal Audit Virtual Forum

2 December 2020

Please note:

  • All Institute responses are boxed and highlighted blue.
  • Where the chair comments in that capacity, this box is highlighted in yellow.
  • The comments from the President/CEO of IIA Global are highlighted in heather.
  • For confidentiality, the identities of all delegates/attendees are anonymised.

Chair's opening comments

The Institute recently published the report Organisations Preparedness for Climate Change. Some of you may also have heard me reflect on the key messages of that report in our climate change live stream on Facebook.

On a personal level, I feel the need to enhance my focus and contribution to creating a better environment. I want to encourage you, my internal audit peers, to also up your game and support your organisations to respond positively to the reality of climate change.

I would like you to think about three recent quotes from an audit committee chair, head of internal audit and head of sustainability.

“Internal Audit simply has to be forward looking now…critical thinkers and most importantly, critical influencers”

“Five years ago, we viewed climate change as a risk and responded accordingly by starting to define risk mitigation or risk avoidance responses. Now we understand it properly and recognise that this is actually an opportunity to contribute to a better future. An opportunity we simply have to grab now”

“My internal audit function has a significant challenge to become more knowledgeable on several topics, particularly climate and sustainability. They must invest in learning because we need them. If they don’t then we will certainly be impacted by their silence.”

Our guest speaker today will talk about how his organisation is responding to the challenge. Air travel will resonate with many of us and I encourage you to focus on this personal connection as it may help you to think differently when considering the implications for your own organisations, not just in relation to business travel but the broader services and ways of working that impact our carbon footprint.


Participants

Chair: Derek Jamieson - Director of Regions, Chartered IIA
Institute: John Wood - CEO, Chartered IIA
Speaker: Siebrand Wolberink - Head of Internal Audit, Skyscanner


Key takeaways

• Sustainability = living life to the fullest without compromising future generations’ ability to do so.

• Aviation industry forecasts estimate a doubling of fuel requirements by 2050. It currently contributes 2-3% of global CO2 emissions that contribute to climate change. If the industry was a country, it would rank in 6th place of worst pollutants. 

• Skyscanner is clear about its answer to the question why care?

  • Because we care
  • Because the world demands it 
  • Because stakeholders demand it.

• Companies with a mission and a strong stance on climate change are winning

• Skyscanner's mission: lead the world with modern and sustainable travel

• The nature and scale of disruption has changed such that it threatens viability.

• Internal audit can focus on both internal and external activities, including risk appetite, stakeholder engagement, carbon usage, reporting accuracy and benchmarking initiatives.

We have an opportunity to change, we can all influence our stakeholders to start shifting the tide.

Click here to access the presentation slides from today's forum.

Institute's comments

This is a subject that we need all need to engage with. As CEO of the Chartered IIA, I need to ask what we are doing and question if we measure enough of what we do and like many of you I don’t think we do. We all, each and every one of us, need to look at first principles.

Our resources page includes a quick reference guide to a suite of climate-related guidance we have published this year, including auditing carbon usage, understanding climate financial risk and auditing climate data.

 

View from Richard Chambers, President/CEO OF IIA Global

Having travelled extensively as part of my global role, this year has given me an opportunity to be at home more. I don’t know that I would’ve made the decision to step down from my role if I hadn’t had this experience. I think there’s going to be a lot more people reflecting on it and 2021 being different.

Here in the US, it’s clear that there doesn’t seem to be a global consensus on what climate change means. There is always the possibility that the biggest contributors, companies and countries, will be the last to want to transform. It’s hard to drive change without incentive to change or penalties for not changing.

This subject is a real opportunity for internal audit. It’s easy to look at compliance with targets and the risk of penalties, it’s more of an imperative to influence behavioural change.

 

Chair's closing comments

The most impactful of the earlier quotes is the potential for audit to be silent. This cannot be allowed to happen as it would be a failure to meet our responsibility to provide assurance over the management of risk.

Our role in climate assurance is about insight, foresight, and making a difference.

Too many of the responses in the climate report I referred to earlier used the ‘unsure’ option; unsure about government guidance, unsure about what their organisation needed to do and unsure about their organisation’s response.

Heads of internal audit need to have certainty. You need to be certain about the engagement and response of your organisation. Unsure is not acceptable for us as a profession.

Climate change is now as much about the upside of risk as it is the downside – how many of your organisations are treating this as an opportunity?

We have focused on air travel today. Consider how you audit travel in general and how these new insights might inform your approach to all other climate and sustainability work.

I challenge you to look at your audit plan and ask if coverage of climate change is appropriate.

We have talked about measurement being a useful start point, understanding what is relevant, ensuring data accuracy, setting appropriate targets and assessing achievement.

I ask you to read our report and close with you a quote which stood out for me by Stephen Licence, Group Chief Internal Auditor, Legal & General Group.

“The opportunities as an internal audit function are to give insights and assurance on the most significant and high-profile risk facing society as well as the organisation. This means they need to have the right skills, so there is an opportunity for the team to expand their knowledge and grow in a new and important topic that is going to be here for a long time. It is about continuing to be relevant and to have an impact.”

Click here for our events page where you will find virtual sessions on a range of topics, including remote working, audit planning and risk management.

After the next forum, we will move to a monthly schedule for 2021.

We will propose the initial topics for you to vote on at our next meeting. 

 

During our earlier forums, many of you shared your experiences of 2020, including some great solutions to the challenges that the pandemic has presented. We would actively encourage you to enter our 2021 Audit  & Risk Awards. There are five categories to choose from and deadlines for nominations close on Friday 29 January 2021. For more details, click here

Please contact me if you are interested in sharing your experiences on a particular topic with this forum, there is real benefit in sharing as collaboration helps us all to develop and improve.   

Forums for your information

HIA Forum

Fortnightly – Zoom

Presentations and interactive Q&A

Institute invitation only, contact

Liz.sandwith@iia.org.uk

Derek.jamieson@iia.org.uk

Local Authority Forum

Monthly – MS Teams

Presentations and interactive Q&A

Institute invitation only, contact

Liz.sandwith@iia.org.uk

IA Change Forum

(agile working)

Ad-hoc self-help group sharing practical insights and ways of working

 

To join these groups contact

Derek.jamieson@iia.org.uk

 

 

Data Analytics Working Group

Next meeting 24 November

Ad-hoc self-help group sharing practical insights and ways of working

         

Next meeting

16 December – Brexit. A practical session with heads of internal audit sharing thoughts on the challenges and solutions as we approach the 31 December deadline – the day we leave the EU. We will also include a poll for you to vote on future topics.


Chat box comments from attendee

• Do people think that business travel (and travel for audit purposes too) within their organisations will quickly revert back to pre-covid levels or will we continue to make more use of virtual meetings?

  • Although I work in a multi-national organisation, I expect to do much less travel and to keep doing virtual meetings
  • We have found that removing travel has allowed more people to attend meetings - less logistical issues/less lost time.
  • Last year our organisation implemented a business-wide ban on UK flights (except to the Scottish islands) and a rule that all travel must be done by train, with only a few exceptions.
  • We have learned that we don't need to travel, so we plan for a reduction in future, plus it helps with life/work balance.
  • We're battling with this. We have set ambitious KPIs in respect of carbon emissions and travel accounts for circa 30% of emissions currently. There are strong arguments to maintain a digital first approach, but this needs to be balanced with the impact on global engagement and staff/customer experience.
  • We have saved 400 audit days in travel time. We won’t be returning to the levels of travel. Also, our customers have learned that we can audit remotely, and they can use the technology. We now know more "faces" recognised through remote calls rather than a that very old telephone technology.

• Is anyone auditing their organisation's climate change strategy and risks? It's not just about travel eg waste management (significant for Local Authorities); recycling; and document/paper disposal?

• Over the last few years in the businesses I have worked for there has been a focus on waste and reducing these numbers. Does anyone else see changes?

• One of the reasons we are looking at our real estate portfolio is partly due to climate change.

• We are accelerating our office strategy review - moving away from dedicated local offices to the idea of public hubs/touchdown places. We are also moving people to permanent homeworking once restrictions lift for those staff that want to remain working from home.

• How do you manage the conflict between your sustainability goals and your business model which depends on flight bookings? These competing goals must leave you with conflicting priorities and therefore risks.

  • It's a balance. The options simply put are 1) do nothing, 2) stop the business as it contributes to CO2 or 3) minimise the impact as much as reasonable possible. So, with option 3, it is a balance. With travel being decimated (15-20% of global travel compared to last year), many travel companies are more in survival mode than in sustainability mode. So ultimately the best effort is to make choices clear - and reassess them periodically. Hope that makes sense.