FRC asks auditors, accountants and actuaries to address the climate challenge

Jul 02, 2020

Hannah Armitage of the FRC's Financial Reporting Lab on July 1 described the key role the FRC plays in ensuring that market and financial system participants take into account climate-related issues, and that companies provide information to investors and other stakeholders about their plans for the future and the challenges and opportunities they face in a future low carbon economy.

Marking the beginning of London Climate Action Week (Digital), Armitage described climate change as being high on the FRC’s agenda as the regulator of the accounting, auditing and actuarial sectors. She announced that the FRC is carrying out a thematic review to understand what boards, companies, auditors and professional bodies are doing to consider and report on the climate-related issues they face within their own areas of responsibility. 

The Joint Forum on Actuarial Regulation, of which the FRC is the Chair, also recently identified climate change as a main risk in its ‘Risk Perspective’. 

Although Armitage acknowledged that reporting on the effects of climate is not easy, involving, as it does, making assessments of an uncertain future and its impact on business, she stated that working out how we benchmark against this uncertain future is part of the ongoing work currently happening on climate change at the moment, and cited as examples: the FCA’s consultation on ‘comply or explain’ reporting on TCFD (Taskforce on Climate-related Financial Disclosures), work on the Pensions Bill regarding climate change, the IASB briefing note on the impact of climate change on financial reporting, and the efforts and insights shared by those taking part in the London Climate Action Week events.
 
Click here for more information on London Climate Action week, including a link to the recording debate “Peak TCFD”, a turning point where the Task Force’s recommendations have surpassed a critical mass for mainstream adoption.