26 September 2018
ClientEarth has referred four UK companies (EasyJet, Balfour Beatty, EnQuest and Bodycote) to the Financial Reporting Council (FRC) over failures to adequately address climate change trends and risks in their annual reports. In addition, they have also written letters to each of the companies’ auditors (PwC, KPMG, EY, and Deloitte - respectively) asking them questions about how they address climate change-related issues in their audits. 
While some of these companies do acknowledge their greenhouse gas emissions and discuss efforts to reduce them (typically in corporate responsibility sections of their reports), none of the four provide any substantive discussion of the risks and trends facing their business from climate change and the low carbon transition. In ClientEarth’s view, this makes them clear outliers amongst their peers and potentially in breach of UK reporting requirements. They have asked the FRC to investigate and to ensure any deficiencies are corrected.
Under recently introduced legal requirements relating to UK audits, ClientEarth believe auditors should also be taking these issues into account when conducting their audits – and has requested clarification about if and how they do so.
Further details (including the complaints and letters themselves) are available on Client Earth’s website. The Telegraph has also covered the story.