An investor group managing around $4.5tn worth of assets have issued a warning to the top four auditing giants to start including climate risk into their audits, or risk rebellions at AGMs, according to reports.
In a letter seen by Reuters, which first reported the news, the investors told the Big Four auditors that unless climate risk was factored into audits, from next year they would vote at AGMs to stop the audit behemoths from working for companies they invest in.
The communication, dated Nov 1, comes against the backdrop of COP26, the global climate change summit hosted by the UK in Glasgow, and was sent to Deloitte, EY, KPMG and PwC.
The investor group have previously voiced their concerns about climate risk and audits too, and urged governments to force auditors to conduct accounts with climate change in mind.
But after three years of discussions with the Big Four firms, the investors said they “”cannot afford to wait another three years” for audits to improve.
The group, made up of 24 investors, include asset managers Sarasin & Partners, Pictet and Aviva Investors and pension schemes including RPMI Railpen.