Sunday 24 April 2022 11:39 am

Activist investors look to block Deloitte audit appointment over climate failings

City Editor

A group of investors including Aviva and Legal & General are readying to move against accountancy giant Deloitte this week in a bid to bar its reappointment as the auditor of FTSE 100 building supply firm CRH.

Climate Action 100+, a shareholder activist group of 700 investors with a combined $68tn assets under management, will vote against the reappointment at CRH’s annual general meeting this Thursday, the Sunday Times first reported.

The group claims that Dublin-based CRH’s accounts fail to map out how its finances would be impacted by changes to climate policy including the introduction of carbon taxes and stricter requirement for firms to slash emissions.

Cement and building materials maker CRH, led by boss Alber Manifold, has a “path to net zero strategy” that it says is aligned with requirements set out in the 2015 Paris Agreement.

But Climate Action says the plan fails to factor in “material risks” from climate change.

The group warned the omission could lead to a “misallocation of capital into excessively carbon-intensive activities, thereby potentially destroying shareholder value”.

The group is now preparing to vote against the reappointment of Deloitte Ireland and audit committee chairman Shaun Kelly, a former partner at KPMG, as well as vote against the firm’s annual accounts, the Sunday Times reports.

Vice chairwoman of Climate Action 100+ steering committe said the vote “could be a watershed moment in the campaign to hold audit committee chairs and auditors to account”.

Audit watchdog the Financial Reporting Council warned that climate changes risk was a top priority for auditors in the next year.

Climate Action’s campaign against Deloitte comes just one week after the big four firm was hit with a £2m fine over failings in the audit of facilities management firm Mitie.

Deloitte exits more London offices after setting out permanent work-from-home policy

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