Bringing you live news and features since 2013
Bringing you news, views and analysis since 2013

31883

Sarasin spearheads push for improved climate change risk reporting

RELATED TOPICS​

The International Accounting Standards Board should be commended for its latest guidance on how companies should incorporate material climate risk into financial reporting, according to Natasha Landell-Mills, head of stewardship at Sarasin and Partners.

“This is a vital step in ensuring financial flows are aligned with the Paris Agreement’s goals of keeping global warming well below 2C, with an aim of 1.5C,” she says. “Critically, the paper emphasises materiality is not merely an assessment by incumbent directors of their view of the quantitative impact. Directors must regard whether investors ‘could reasonably expect that emerging risks, including climate-related risks, could affect the amounts and disclosures reported in the financial statements.’

“The letters [attached] we sent to the Big Four audit firms, which we published today, explicitly state investors expect to see fossil-fuel-related companies take account of climate risks in financial statements. In other words, these risks should be treated as material for the purposes of financial reporting.

“We will be writing to individual company audit committee chairs and lead audit partners over the coming weeks, setting out these expectations for 2019 annual reports and accounts. We will specifically ask for assumptions to be stress-tested for Paris Agreement alignment, to ensure investors can see how resilient companies are in relation to government climate policies.

“If company audit committees and auditors fail to ensure Paris Agreement-aligned accounting, investors should vote against their reappointment. Governments should consider mandating Paris-aligned accounting. This should not be optional.”

Latest News

RQI Investors, an Australian-based active quantitative equities manager and part of the First Sentier Investors..
UK-based wealth management companies London & Capital and Waverton have announced that they have reached..
Figment Europe, a provider of institutional staking infrastructure, writes that it is solidifying its presence..

Related Articles

British pound coin
Fixed income’s return to favour following widespread interest rate rises has led to investors overcrowding sterling investment grade credit, delegates at the Pensions and Lifetime Savings Association investment conference have heard...
Fixed income’s return to favour following widespread interest rate rises has led to investors overcrowding sterling investment grade credit, delegates..
Sustainable Economy Top Panel
Europe is driving the growth in sustainable investment with global assets under management in ESG-labelled funds passing USD2.8 trillion...
Europe is driving the growth in sustainable investment with global assets under management in ESG-labelled funds passing USD2.8 trillion...
Pension funds
UK institutional investors are questioning the value of investing in private markets despite pressure from government to finance the country’s net zero and levelling up ambitions...
UK institutional investors are questioning the value of investing in private markets despite pressure from government to finance the country’s..
Juan Nozal, Mapfre Asset Management
Juan Nozal, Fixed Income Portfolio Manager at MAPFRE Asset Management, talks about the outlook for fixed income assets over 2024, in what he predicts will be an outstanding year for this asset class...
Juan Nozal, Fixed Income Portfolio Manager at MAPFRE Asset Management, talks about the outlook for fixed income assets over 2024,..
Subscribe to the Institutional Asset Manager newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by