Big Four firm Deloitte unveiled a climate technology initiative Wednesday to accelerate development of ways to reduce carbon emissions, while separately releasing reports on audit committee priorities, human capital and M&A trends.
The climate technology effort,
The move comes as more large accounting firms get involved with helping their clients with sustainability reporting and the trend toward environmental, social and governance investing, although ESG funds have lately been facing a political backlash in some states like Florida and Texas.
"There is a tremendous opportunity for the business community to lead as we chart a responsible path to a decarbonized economy," said Deloitte Global CEO Joe Ucuzoglu in a statement. "Deloitte is committed to being at the forefront of emerging climate technology to help advance this societal imperative and accelerate organizations' progress toward decarbonization."
The climate technology that Deloitte hopes to promote could help companies reduce their energy costs. GreenSpace Tech is Deloitte's latest investment in the environmental sustainability space, following last year's $1 billion launch of its
"Whether an organization is looking to address electrification, sustainable aviation fuel, carbon capture, sustainable agriculture or any number of other sustainability challenges, GreenSpace Tech is changing the game — it is uniquely positioned to develop new ecosystems and connect clients with the knowledge and solutions they need to achieve their sustainability goals quickly and effectively," said GreenSpace Tech global leader Andrea Culligan a partner at Deloitte Australia.
"I've also witnessed first-hand how difficult it can be for startups to scale their technologies within large enterprises," she continued. "GreenSpace Tech has a clear role — allowing organizations to pinpoint the top climate technologies globally and work with innovators and organizations alike to deploy them at scale — thereby enabling businesses to fast-track their decarbonization agenda, by selecting and investing in the right technologies to drive and scale impact."
Audit committee report
Separately on Wednesday, Deloitte teamed up with the Center for Audit Quality on their second
The survey of 164 audit committee members found that over the next 12 months, one quarter of respondents expect to make changes to the composition of their audit committee, with 25% anticipating increasing the size of their audit committee, 28% planning on replacing their audit committee chair and 42% expecting to replace one or more committee members.
The overwhelming majority (92%) of audit committee members polled said they have the expertise they need, but nevertheless called for additional skills such as cybersecurity and technology as areas of expertise that could enhance their effectiveness. Slightly over half (53%) of respondents reported that their companies delegate cybersecurity oversight to audit committees.
In addition, 43% of the respondents indicated audit committees were responsible for enterprise risk management oversight within their organizations and 34% of respondents said audit committees were responsible for the oversight of ESG disclosure and reporting — a significant 24-point increase over the previous year.
"Audit committees continue to be challenged by scope creep — new demands that involve overseeing areas of disclosure and reporting that extend beyond their historical core responsibility of financial reporting and audit oversight," said Krista Parsons, audit and assurance managing director with Deloitte's Center for Board Effectiveness and Audit Committee Program leader. "As a result, audit committees are considering if their composition needs to change. The good news is that audit committees overwhelmingly report (92%) they have the expertise they need. Still, it is critically important for audit committees to continuously assess their current composition and skillset to make sure it meets the needs of the organization and the risks it faces."
While regulators are calling for greater attention on fraud detection, only 20% of respondents ranked fraud risk among their top three focus areas in the next 12 months. That response rate was slightly higher at 29% for those on the audit committee of financial services companies.
Human capital and M&A trends
Deloitte released a separate report Tuesday on human resources. The firm's
Also on Tuesday, Deloitte's Center for Controllership released
M&A-driven finance transformation is leading to adoption of new technology, including analytics, ERP modernization and workflow management.
"For many controllers, CFOs and their teams, transactions offer a long-awaited business case to kick-start controllership-centered transformation efforts," said Maria Bunch, a Deloitte risk & financial advisory principal in transaction execution, accounting, reporting and integration at Deloitte & Touche, in a statement. "Dealmaking often results in investments focused on streamlining controllership systems and enhancing the flexibility and agility needed to transact, manage financial close and report within the new company structure."
This year, respondents expect the biggest challenge to finance or accounting teams supporting M&A activity will be the continuation of manual, outdated, or duplicative business processes (28.4%), followed by lack of appropriately skilled talent (26.2%) and the presence of disparate or outdated finance and accounting technology (25%).
