Climate risk and internal audit

When properly resourced, positioned and targeted, professional internal audit provides the kind of insight 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, as we know, 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 focussed action.”

If it all seems too big, too inaccessible and too remote then this article is for you. As is our podcast by Jonathan Porritt, business and prevention of environmental collapse. 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, Risk in Focus 2020 – our annual report for internal auditors - found only 14% of organisations have environment and climate change as a top five risk.

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…