One of the enduring impacts of the pandemic looks to be the raised awareness of climate and environmental concerns. The welcome reprieve from pollution in many of our towns and cities provided a clear indication of how the world would improve with a focus on reducing environmental harm. The need to be serious about embedding real and sustainable improvements is now a priority for investors, employees and customers. And its clearly central to business strategy as never before.

By the end of 2021 the largest UK companies will be required to report in accordance with the Task Force on Climate-Related Financial Disclosure (TCFD) requirements. The framework requires reporting on:

• Governance: how the organisation has oversight of climate related risks and opportunities
• Strategy: actual and potential risks and opportunities associated with climate on the business strategy and financial planning
• Risk management: identification, assessment and management of climate-related risks
• Metrics and targets: information used to assess and manage climate related risks and opportunities

At the same time many companies are embracing broader Environmental, Societal and Governance (ESG) reporting as an integrated element of the narrative external reporting in their annual reports, websites and beyond. There is clearly a growing clamour for this information.

We welcome the announcement of the formation of the International Sustainability Standards Board to develop a common and comparable set of standards for all company reporting, but this will take time to develop and evolve, leaving board and executive teams to determine their own approach in the short term.

Underpinning the question, of what to report, is how do you gain confidence that the reported information is reliable and a fair representation of your organisation, that the commitments you are making are reasonable, and that you are managing the associated delivery risks within your risk appetite and tolerance levels? Only with this confidence can you be assured that the disclosures are not simply green-washing.

The BEIS consultation on Restoring Trust in Audit and Corporate Governance outlines an expectation that companies will discuss the assurance they receive over all aspects of their risk framework and all elements of disclosure in the annual report and beyond. Climate and environmental risks will be a central part of this expectation.

We believe that responsibility for delivering the confidence Boards and executive management need lies within the organisation. Risk, assurance and internal audit professionals will need to step up and develop the skills and capabilities to deliver on this agenda, in a similar way to financial disclosures. Risk management processes must be inclusive of these risks and management must understand how to monitor and report on them. Internal audit will need to create new approaches to auditing in this environment – the most innovative and advanced already are.

I am looking forward to exploring this further with ICAEW in a forthcoming project and welcome any approaches from professionals interested in being involved.