Unique Role of SAIs in Environmental and Climate Change | EUROSAI Analysis Pack

EUROSAI analysis pack: The unique role SAIs can play on environment and climate change October 2021 | 1

Aim of this analysis pack This pack is intended to be a useful resource for SAIs in their work on the environment and climate change. In particular, SAIs may find it useful to help: explain the environmental role of a SAI to stakeholders develop ideas for new environmental audits scope existing environmental audits The ideas presented in this pack are not intended to be exhaustive or prescriptive: there will be other ways a SAI can engage with environment and climate change issues, and other ways of thinking about and describing the valuable role that SAIs can play. If a SAI identifies a significant potential addition or suggested change to the contents of this pack, please get in touch so that the pack can be refined. | 2

Overview: SAIs role for environment and climate change Supreme Audit Institutions (SAIs) can draw on a unique set of strengths to help assess whether environmental ambition is translated into effective action SAIs provide the highest independent public auditing function of a state or supranational organisation. The exact mandate and constitution of individual SAIs varies, but can include valuable attributes for examining and influencing governments approach to environmental goals and risks, such as: Programme delivery and financial & risk management expertise Analytical expertise Access rights Cross-government perspective Regular engagement with senior government staff .. | 3

Overview: SAIs role for environment and climate change This pack illustrates four key ways in which SAIs can often add value on issues of environment and climate change within their countries. 3. Examining whether governments have a framework (for example for monitoring progress, and co-ordinating across government) that is likely to support long-term success (page 7) 4. Encouraging audited bodies to take a robust approach to assessing and reporting environmental and climate risks for their organisation 1. Holding governments to account for how public money is used to achieve environmental aims 2. Testing the realism of governments delivery plans (page 8) (page 5) (page 6) | 4

1: Hold government to account for use of public money to achieve environmental aims Many governments are spending increasing amounts of public money on tackling the environmental challenges faced by their country. As with all government spend, a SAI can take a role in ensuring this money is put to good use. Why this matters Environmental spend can be particularly at risk of decisions being made quickly in order to be seen to respond to the increasing awareness of environmental issues worldwide. A government may also need to act quickly to tackle an environmental hazard. Delivery at speed can bring risks for value-for-money and outcomes which governments will need to manage. Ways the strengths of a SAI can be applied to this area could include: Work a SAI could carry out in this area could include: Cross-government perspective Analytical expertise auditing areas of environmental spend that are high value and/or high risk .. drawing on experience of assessing wider projects and programmes to identify risks governments will need to manage assessing the quality of evidence used to inform decision making, and highlighting any significant gaps in understanding. carrying out a broad review of public expenditure relating to an environmental issue, including consumer-funded schemes and as a result of regulation as well as exchequer spending developing an understanding of what good value for money looks like in situations where governments may need to take risks and act quickly to tackle an environmental issue. Access Rights ..examining the robustness of the evidence regarding performance and spend on governments environmental projects and programmes. | 5

2: Test the realism of governments delivery plans Governments worldwide have increasingly high ambitions for action on the environment and climate change. SAIs can take a role in assessing whether these ambitions are matched with realistic plans for delivery. Why this matters Without realistic plans for delivery, there are risks that key actions are delayed, making governments environmental targets more difficult or costly to deliver in the long-term. Ways the strengths of a SAI can be applied to this area could include: Work a SAI could carry out in this area could include: Programme delivery expertise by identifying potential risks and opportunities for environmental delivery plans, based on lessons learned from reviews of wider projects and programmes across government. Cross-government perspective by identifying potential gaps in plans, or conflicts that will need to be managed including an assessment of forward plans, including contingency planning, as part of performance audits of past expenditure carrying out a broad review of government s approach to meeting its environmental objectives (either as a whole, or for selected objectives) assessing whether government has quantified the cost of achieving targets and the impact of delays | 6

2: Examine whether governments have a framework that is likely to support long-term success Achieving governments environmental goals can require co-ordinated effort from a broad group of stakeholders across the public and private sectors. SAIs can take a role in assessing whether governments have good arrangements for engaging others, holding people accountable and monitoring progress. Why this matters Without good co-ordination and accountability arrangements it is likely to be more difficult or costly to achieve government s environmental objectives in the long- term. Ways the unique attributes of a SAI can be applied to this area could include: Work a SAI could carry out in this area could include: Cross government perspective by incorporating an assessment of environmental impact and performance into wider performance audits, where relevant, for example for audits of major infrastructure projects Programme delivery expertise .by drawing out good practice lessons from reviews of other complex and cross-cutting projects and programmes across government. Assessing how major fiscal events (as part of the government budget cycle) consider long term plans. carrying out a broad review of government s approach to meeting its environmental objectives (either as a whole, or for selected objectives) Examining works with others across government and in the private sector Considering the alignment of government s direct environmental impacts (for example through its estate and procurement) with environmental objectives | 7

4: Encourage audited bodies to take a robust approach to assessing and reporting environmental and climate risks for their organisation A SAI s work auditing government s annual reporting means it is well placed to support appropriate consideration and disclosure of climate and environment risks by audited bodies. Why this matters Environment and climate change risks are of increasing importance to the activities of government, and there is an increasing expectation that organisations include discussion of them within their reporting. The environmental reporting expectations placed on governmental organisations are likely to develop over the coming years, both through changes in international standards and through reporting requirements developed by a country s government. As with financial reporting, a SAI has a role in supporting and auditing the disclosures that are made, and ensuring its staff are up to date with requirements. Ways the unique attributes of a SAI can be applied to this area could include: Work a SAI could carry out in this area could include: training SAI staff to be able to provide support to clients beginning to consider these risks. Regular engagement with senior government staff Financial and risk management expertise ensuring it is fully prepared for any upcoming changes in reporting requirements. .by discussing environmental and climate risks and reporting as part of existing client relationships. by drawing out good practice lessons from wider risk management guidance and experience. raising issues of environmental and climate change risk in conversations with senior officials and audit committees. carrying out targeted work to examine the risks faced by a specific organisation, and to assess their approach to these. | 8