With just ten days left to go until the historic COP26 UN Climate Summit in Glasgow, today the Chartered Institute of Internal Auditors (Chartered IIA) has worked with BSI, to urge business leaders to prioritise action on climate risk.
To support their call to action the two organisations have issued a new guide ‘Harnessing internal audit against climate risk: a guide for audit committees and directors’. The guide is aimed at encouraging company directors, in particular audit committees, to make better use of their internal audit functions in identifying, managing and mitigating the risks and opportunities associated with climate change.
With a broad remit and unrestricted scope to examine all parts of an organisation, as well as a direct line to the audit committee, internal auditors are in a unique and strong position to help drive meaningful action on climate change and its associated risks. However, the Chartered Institute of Internal Auditors is concerned that audit committee chairs, board members and senior leaders aren’t always using their internal audit functions to their full advantage, even though it is potentially one of the most powerful tools they have in their armoury. Providing independent, objective assurance over how well an organisation is managing climate-related risks.
The guide is published after last month a new poll of over seven hundred Chief Audit Executives across Europe revealed that that around 9 in 10 organisations are not committing major time and effort to preparing for the rising risk of climate change.
“Climate change is the most acute challenge facing our planet right now. With COP26 just days away we urge business leaders to play their full part by prioritising action on climate risk. With its unrestricted scope and mandate, internal audit is in a strong position to work with company directors to help drive meaningful action on climate change, ensuring that their organisations are fully prepared for climate-related risks and on a sustainable footing for the long-term. Environmental sustainability must become a fundamental and intrinsic component of good corporate governance.”
“We believe that businesses have a responsibility to take action to reduce their climate-related risks and achieve sustainable growth. That is why BSI is committed to ensure global standards support climate action and achieve global climate goals. To deliver this, we are now embedding climate considerations into every new standard that is created, as well as retrospectively adding requirements to existing standards as they are revised. Internal audit has an important role to play in providing assurance to company directors and audit committees that these new and revised standards are being met, along with other aspects of climate risk.”
“The joint Chartered IIA and BSI guide for audit committees and directors on harnessing internal audit against climate risk could not be more timely, published on the eve of the COP26 climate conference in Glasgow. Internal audit absolutely has a key role to play in working with company directors and the audit committee to ensure that the organisation is managing and mitigating climate risk effectively. I echo the call for company directors to start taking climate risk more seriously and ensure they are prioritising action on it.”
The full guide is available here.
For more information or further comment, please contact Gavin Hayes, our Head of Policy and External Affairs on 07900 195 591, or via email at email@example.com.