Glasgow COP26: Investors warn Big 4 auditors to include climate accounting

The challenge marks an escalation in the group's efforts to ensure investors were armed with robust information

Major investors have warned the world’s top four audit firms they will vote to stop the firms working for the companies they invest in at AGMs from next year if audits do not integrate climate risk.
 

The challenge, laid out in letters from an investor group managing around $4.5 trillion that were seen by Reuters, marks an escalation in the group’s efforts to ensure investors were armed with robust information. Ahead of the COP26 climate talks in Scotland, the group had called for governments to force companies and auditors to file accounts in line with the world’s goal of limiting global warming by mid-century.
 

The letters dated November 1 and sent to Deloitte, EY, KPMG and PwC by the investor group pointed to recent research showing more than 70 per cent of assessed 2020 audits had fallen short.
 

The group includes asset managers Sarasin & Partners, Pictet and Aviva Investors and pension schemes including RPMI Railpen. The investors said that after three years of discussions with the firms, they “cannot afford to wait another three years” for audits to improve.
 

At the next season for corporate annual general meetings, the auditors could “increasingly expect to see” investors vote against their reappointment if they failed to meet expectations, the letters said.

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