Business

90% of firms unprepared for climate change risks, Chartered IIA warns

The new report tracks the risks facing organisations year-on-year as ranked by more than 700 CAEs representing a range of organisations

The Chartered IIA has found that around nine in 10 organisations are not committing “major time and effort” to prepare for the rising risk of climate change, and is calling on businesses to act now to avoid disruption in the future.

It comes amid the release of its latest Risk in Focus Report which has also found an increase of 41% in chief audit executives (CAEs) seeing climate change as a top-five risk when compared to last year – but only around one in 10 (12%) are spending “significant time and effort” preparing for this threat now.      

The report tracks the risks facing organisations year-on-year as ranked by more than 700 CAEs representing a range of organisations including leading businesses, public sector organisations and NGOs from across Europe.

It said climate change has been “steadily rising up the agenda”, climbing four positions in the rankings since 2021 and is now in the top 10 for the first time. 

The Chartered IIA added it is “alarmed’ by the gap between awareness and action taken on this rising risk and encourages organisations to act now to avoid disruption in the future. 

As such, the Chartered IIA said it recommends that organisations consider climate change a “forever risk”, and has urged them act to defend against this now by:

  • Ensuring climate change and sustainability is central to the organisation’s values, mission and strategic goals
  • Establishing sustainability goals which align with the UN’s 17 Sustainable Development Goals
  • Investing in projects that will future proof products and services,
  • Planning for any climate-related physical and political risks which may jeopardise an organisation’s future
  • Reducing organisational greenhouse emissions and moving away from harmful or unsustainable manufacturing processes or materials.

John Wood, chief executive of the Chartered IIA, said: “The rapid and radical adaptation seen across the corporate landscape during the pandemic demonstrates what businesses are capable of when needs must. Now is the time for similar innovation in response to the growing risk posed by climate change. 

“Businesses should prepare for climate change risks now to avoid large-scale disruption in the coming years, and internal auditors must play crucial planning and monitoring roles here. Those that fail to do so put their continued existence in jeopardy.” 

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