The Audit Committee Frontier

This first issue of the Deloitte Global Boardroom Program’s new series, The Audit Committee Frontier, seeks to answer the question: What are leading practices for Audit Committees with respect to climate?

The global report features findings from a survey of over 350 audit committee members spanning over 40 geographies. It revealed several obstacles standing in the way towards progress, and details potential solutions for audit committees struggling to help their organizations address climate change.

Every geography is at varying levels of progress in their fight against climate change. To put a spotlight on Singapore, we are pleased to present our perspective – one which we have developed based on the survey findings for the broader APAC region, as well as our own local research and marketplace observations.

Overall, the survey found audit committees in the APAC region to be the least prepared for climate change when compared to their global counterparts. This is not a surprise: in Singapore and across the broader APAC region, climate literacy in the boardroom remains patchy, with significant reliance on management or outside parties.

Audit committees must continue to factor in a more concerted focus on climate issues and make bigger strides to establish stakeholder trust. With audit committees viewed by shareholders and other stakeholders as “reporting arbiters”, there appears to be a growing urgency for them to become more climate literate. The good news is that some encouraging signs of progress can be observed in Singapore. The recent launch of Climate Governance Singapore, the Singapore chapter of the Climate Governance Initiative, aims to bring more discussions on climate change into boardrooms, and increase board members’ awareness and literacy on the risk and opportunities associated with climate change. The regulatory landscape is also rapidly developing with the Singapore Exchange’s roadmap for issuers to provide climate reporting on a ‘comply or explain’ basis in their sustainability reports from financial year 2022.

For audit committees navigating these crosscurrents, we have also identified key questions for audit committees to consider so that they are well positioned to address these challenges and emerge stronger.