Climate risk and internal audit

When properly resourced, positioned and targeted, professional internal audit provides the kind of climate assurance insights that boards need to make effective decisions. 

Over the past decade or so, internal audit has been moving out of the back office in many organisations to play a leading role in helping businesses get to grips with today’s dynamic risk landscape. With that, audit leaders have become trusted advisors to boards on an increasingly complex range of risks including identification and management of climate risk.

Climate change is a key issue in today’s risk landscape and brings with it both challenges and opportunities for audit leaders. According to Mark Tucker, Group Chairman for HSBC: “Climate Change is not only one of the biggest challenges facing UK businesses today, it is also a huge opportunity. Meeting the challenge and making the most of this opportunity depends on corporate boards being well briefed and committed to focused action.”

If it all seems too big, too inaccessible and too remote then this article is for you. To help navigate your understanding of climate risk and why it's important, we give you three priorities, five conversations and 10 top tips.


Three climate risk priorities for audit leaders

Climate risks are those arising from the effect of global warming. Yet despite the world being in the midst of a climate crisis, only a third of CAEs put it in the top five risks of Risk in Focus 2024.

Scientists talk about the need to reduce greenhouse gases and move to a low-carbon economy to limit these effects, a goal endorsed by Mark Carney the UN special envoy for climate action and finance and former governor of the Bank of England.

Of the many climate focused priorities on the radar for governments and business leaders, we focus here…