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UK Financial Governor to Assess How Companies Report on Climate Crisis

Britain’s financial accounting watchdog plans to evaluate how firms and auditors assess and report the impact of climate change on their emterprises, as investors push for higher disclosure of the risks.UK Financial Governor to Assess How Companies Report on Climate Crisis

Climate change has soared to the top of the agenda for traders as policymakers demand firms step up efforts to help push the global transition to a low-carbon economy.

Yet many cash managers are concerned that the information firms give them, and the accounts signed off by auditors, don’t give a full picture of the dangers, leaving them at risk of abrupt losses.

In response, the FRC said its assessment will look into the extent to which British corporations and auditors are responding to climate-associated issues to ensure reporting requirements are being fulfilled.

The FRC stated it will check company reports and accounts for their compliance with reporting necessities, and audits to see how auditors mirror climate risk, in terms of the judgments they make as well as any related disclosures.

As well as assessing how much resource auditors, including KPMG, EY, Deloitte and PwC devote to evaluating the impact of climate change, it will additionally assess the standard of future risk disclosures under Britain’s new Corporate Governance Code.

Getting a measure of the longer-term risks posed by climate change, along with the provision of higher data and rigorous stress-testing under a range of eventualities, is increasingly the main concern of global policymakers.

Bank of England (BOE) governor Mark Carney, who leaves in the coming weeks to take up a position as climate envoy at the UN, has said the problem will be an area of focus at the UN’s climate conference in Glasgow in November.

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Michael Gibbons

Michael is the contributing author and editor for the sustainable development column. His articles on sustainable development and what are the key aspects leading to that have always created ripples in society. He has worked with many NGO’s and also government bodies towards the conservation of the environment and sustainable development. He is also a social influencer.

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