Agenda – Audit Committees Question Climate Competency

Climate change has now become the issue of the 21st century.

With the conclusion of COP26 in Glasgow, Scotland — bookended by India’s commitment to achieving net-zero emissions by 2070 and the historic U.S.-China agreement to reach the 1.5 C temperature goal outlined in the Paris Agreement — the three largest polluters in the world have established a framework for reducing greenhouse gas emissions.

The pressure is on for corporate boards to implement effective climate strategies, and audit committees are increasingly being seen as integral to that process. However, a large number of committee members are unsure that they have an adequate understanding of how climate change affects their businesses, and even more think that assessing climate risk is outside of the audit committee’s remit.

Almost half of the 353 audit committee members across 30 geographies, and 51% of those Deloitte surveyed in the Americas, said that they lack the background and the resources to be considered climate literate. Moreover, 62% of respondents in the Americas maintain that climate has no material impact on their businesses. [Emphasis added]

Agenda – Audit Committees Question Climate Competency

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