Why climate change should matter to internal auditors
In a recent IIA survey, only 14% of European CAEs cited environmental and climate change as one their top five risks to their organisation. Sonia Shah explains why it should be higher up the agenda.
ACCA member Sonia Shah of Grant Thornton has written a series of insights articles that highlight the importance of climate risk. The financial sector is already starting to regulate in this area and it's important that internal auditors recognise this risk:
Stress testing can help firms identify and mitigate risks, but climate risk is an emerging area of research and it can be difficult to know where to start. Read about scenario planning in this article.
Good governance starts with the board. Climate risk management is an emerging field, and it's important to keep the board informed on new developments, with the right information and tools to make informed decisions. Read the rest of the article here.
Climate risk is an emerging field, with industry-wide working groups and guidelines gradually moving towards regulation. Last year the Prudential Regulation Authority (PRA) released Supervisory Statement 3/19 (SS3/19), which introduced new requirements for governance, risk management, scenario analysis and disclosure. Further, the PRA recently issued a Dear CEO letter, announcing the end of 2021 as the deadline to embed an approach to managing climate related financial risk. This is the first regulation on climate risk in the financial sector, but as the sector matures more regulators and central banks will follow suit. Read the rest of the article here.
Climate risk is an emerging area of research, and finding the right approach to manage that risk will take time. This article looks at the two approaches that firms can take when addressing climate change risk.
Sonia Shah - Grant Thornton Financial Services Group