Questions to Ask in the Audit Committee
Compliance market
- How are compliance (mandatory) carbon market transactions and pricing accounted for in our internal accounting systems and decision-making processes?
- What are the increased costs of compliance associated with carbon pricing regulation, and with any enhanced disclosure requirements?
- What would be the cost to the organisation of potential regulatory action if there is any failure to comply?
- Do our subsidiaries operating in other countries have new obligations associated with carbon pricing? How are we accounting for this?
- What are our duties and responsibilities in relation to CBAMs, across both the export and import business? Are systems in place and how will we account for, and report on these?
- Are we accurately reporting on the impact of carbon price movements on our business?
Voluntary markets
- Do our activities in the voluntary carbon markets have a clear audit trail?
- Are we transparently reporting our use of voluntary carbon credits in full and how it feeds into our net zero strategy overall?
- How are we managing the potential reputational risk to our business associated with use of voluntary carbon credits?