Investors Demand Big-4 Auditors to Increase Attention to Climate Risks

The group of large investors including asset managers Sarasin & Partners, Pictet, Aviva Investors etc. with $4.5 trln in combined assets have warned the world’s top four audit companies (Deloitte, PwC, KPMG and EY) 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, according to Reuters.

The investors have been pushing auditors to improve for several years amid concern they were misrepresenting the true health of companies by not factoring in potential hits from the impact of climate change and associated policy changes.

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 investors said.

Ahead of the COP26 climate talks in Scotland, the group had also 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.