Climate crisis - time to act
8th January 2020
2020 has a futuristic ring to it but it’s here and it heralds a new decade! Our collective actions in this decade could determine the future of our planet and humanity… what action are you taking?
Only 14% of European CAEs interviewed for Risk in Focus 2020 cited environmental and climate change as one of the top five risks to their organisation. Really? Turn on the news. Read the Audit & Risk special feature (Jan/Feb 2020).
Where does your organisation stand?
- Is your organisation one of the 14%?
- Are you auditing your organisations risk management this year?
- Is it robust, future-focused and honest or do management filter out unpalatable or unmanageable risks?
- How is climate risk addressed?
A key decision for organisations is whether to be a disrupter and make positive change or be disrupted and wait for industry/legislative to force change. The Carbon Disclosure Project estimate climate business opportunities to be in excess of $2.1trn. It’s not all bad news.
- Is your organisation making proactive changes and capitalising on opportunities? And what about internal audit - what action are you taking?
- What assurance are your stakeholders seeking re climate risk? Is climate change on your plan this year?
- Is climate assurance considered in every audit? If not, why?
- Is it a priority for your organisation? If not, why?
- Is it talked about at Board, Audit Committee, Risk Committee, Finance Committee etc? If not, why?
The planet doesn’t have time for you to think about it this year, do something high level next year and then put a programme together. The time for action is now.
How can you enhance and protect organisational value without providing risk-based and objective assurance, advice and insight for climate risk?
Decisions and actions your organisation is taking today might be pivotal in relation to its climate reputation; access to funding, attractiveness to investors, ability to trade, appeal for new employees etc.
Time is of the essence
In 2019 the UK became the first country to legislate its climate commitment – to reduce emissions by at least 100% of 1990 levels (net zero) by 2050. Whilst outperforming targets from 2008 to 2022, the UK is not on track for the third trance 2023-2027. According to the Committee on Climate Change it will require the government to apply more challenging measures to achieve it and the 100% target for 2050.
Change will happen. Speaking in December 2019, Mark Carney, former Governor of the Bank of England and now United Nations Special Envoy for Climate Action and Finance noted that according to pension fund analysis 'if you add up the policies of all of companies out there, they are consistent with warming of 3.7-3.8C.' Way in excess of the Paris Agreement target of 1.5C. Scientists say the risks associated with an increase of 4C include a nine-metre rise in sea levels affecting up to 760 million people, searing heatwaves and droughts, and serious food supply problems.
The climate crisis is a global issue. Few organisations operate in a domestic bubble. There are invariably global consequences to decisions made in boardrooms here in the UK.
You can watch the crisis unfold or YOU CAN ACT.
Further reading
Guidance - Climate change and environmental impact
Blog - Climate change brings evolving and challenging risks for all organisations
