In 2022 organisations were hit by a perfect storm of high-impact, interlocking risks that have thrown businesses into a permanent state of crisis. Climate-related natural disasters, looming recession, an accelerating cost of living catastrophe in Europe, food shortages, employee welfare and skills deficits and a rapidly industrialising cyberattack landscape are overlaid by intensifying geopolitical tensions and the very real threat of financial liquidity and solvency risks for businesses.

 

Climate change is becoming a persistent theme in the "Risk in Focus Surveys", rising this year to sixth place from eighth in 2022 and is a key area of Internal Audit Focus as respondents expect the risk to rise to third place in three years’ time. Enterprises are increasingly focusing their attention and action on climate change and Environmental Risk. Some companies are embedding such matters in their strategic vision and development tactics. Hence, Internal Audit Functions should question if they have the maturity required to tackle those risks.

 

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