Auditors not held to account on climate risk 

Zoya Malik, 30 November


hareholders are waiving through reappointment of auditors that failed to address climate risk in their reports

These are seen to have posed a significant risk to their own investments and the planet, according to new research from Greenpeace.

Between January and August 2021, shareholders voted by 90% or more to reappoint the auditors at all but 3 of 349 large listed companies. The companies Greenpeace analysed were either listed on the UK FTSE100 or FTSE 250, or were one of 78 of major global emitters whose audit reports were identified by Carbon Tracker and the Carbon Accounting Project as failing to meet ‘good practice’. ClientEarth found that only 4% of the audit reports of the 250 largest listed UK companies clearly explained whether the auditors had considered climate change-related factors.

Charlie Kronick, Senior Programme Adviser at Greenpeace UK, said: “Polluting companies and their auditors are failing to integrate climate change and the 1.5 degree target of the Paris Agreement into their business plans and financial statements - for example over-valuing fossil fuels, rather than recognising they need to be phased out. We’re calling for the government to step in by creating a duty for companies and auditors to ensure climate risk is reflected in financial statements.”