Climate change is still ignored in corporate analysis and planning according to a new survey by the Institute of Management Accountants (IMA).
The new survey in which more than 500 respondents working in corporate finance were included, revealed that 32% of the respondents believe that their organization does not consider climate change in their enterprise risk management. Only 7% said their company has a dedicated climate risk management process, while 15% said their in-house enterprise risk management includes climate risks among a wider range of ESG risks.
According to the survey findings finance was identified as one of the least likely departments to be involved in climate risk management. More than one-quarter of respondents said finance and accounting staff only occasionally take part in climate risk management, while 18% said their finance team doesn’t participate in climate risk management at all.
In addition, chief finance officers and CEOs were found to have a shorter-term focus on risk analysis than their lenders and investors. The IMA says this mismatch poses a “significant challenge that requires attention to implementing strategies and reporting around climate issues.”
While many large companies release sustainability reports, small businesses — which make up 99% of registered US businesses — are lagging behind. This may put them at a disadvantage when it comes to attracting fresh capital.
Just over half of all respondents said they are not using sustainable business information in their decision-making at all. Only 26% said this information is used to identify and assess risks.
The respondents skewed towards private companies. About three-quarters of the respondents come from private firms, and 64% come from entities that don’t have to produce public reports.