Climate change is no longer just a buzzword but a reality that businesses and investors must face. With physical and transitional risks that will impact entire economies, it is crucial for all stakeholders to work together to mitigate the systemic and material risks arising from climate change. The accountancy profession can play a crucial role in this effort, particularly in providing assurance services designed to enhance the credibility of climate-related corporate disclosures.
Investors now demand more climate-related information to assist with their economic decision-making. The accountancy profession, with its robust qualifications’ framework, extensive skills and experience, and strong ethical foundation, is well placed to provide the necessary assurance services to enhance the credibility of corporate disclosures. Auditors play a crucial role in enhancing the credibility of financial statements through the independent audit process.
While management and those charged with governance are ultimately responsible for preparing the financial statements, auditors must understand the impact of climate-related risks on the business, including the risks and opportunities that they pose. It is crucial to assess and disclose the impacts of climate-related risks, not just for companies in the energy or manufacturing sectors, but for all companies of all nature and sizes. The impact of these risks can be far-reaching, affecting supply chains, customers, assets, and plans for future strategic acquisitions.
To conclude, as the world becomes more focused on mitigating climate-related risks, it is crucial for organisations to disclose the impact of these risks. The accountancy profession and auditors have a crucial role to play in enhancing the credibility of climate-related corporate disclosures. By working together, businesses, governments, investors, and the accountancy profession can mitigate the systemic and material risks arising from climate change and ensure a more sustainable future.
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