Audit of Balfour Beatty PLC – climate change-related trends and risks

ClientEarth has notified KPMG of its intent to complain to the Financial Reporting Council (FRC) regarding the audit of Balfour Beatty PLC's 2017 Annual Report. ClientEarth argues that Balfour Beatty failed to provide an adequate description of principal risks, main trends, and long-term viability by omitting the impacts of climate change and the low carbon transition. The letter asserts that KPMG, despite its public support for the Task Force on Climate-related Financial Disclosures (TCFD) and its own institutional expertise, failed to apply professional scepticism and judgement as required by International Standards on Auditing (ISAs). ClientEarth specifically questions KPMG's processes for ensuring climate knowledge is integrated into audit programmes and how it identifies material inconsistencies or misstatements in strategic and directors' reports.

• ClientEarth contends that Balfour Beatty PLC's 2017 Annual Report contains material misstatements because it fails to substantively discuss risks or trends associated with climate change or the low carbon transition, despite the company's material exposure as an international infrastructure and construction business.
• ClientEarth argues that KPMG failed to identify these omissions in its audit report, where it stated that it had not identified material misstatements in the Strategic report and the Directors' report and that they were prepared in accordance with the Companies Act 2006.
• The document highlights a contradiction between KPMG's public positioning as a supporter of the Task Force on Climate-related Financial Disclosures (TCFD) and its apparent failure to apply this expertise to the Balfour Beatty audit.
• ClientEarth asserts that under ISA (UK) 200, KPMG was required to exercise professional scepticism and judgement, which should have involved applying its institutional knowledge of climate risks to the audit process.
• The letter claims that under ISA (UK) 315, KPMG should have considered climate change and the low carbon transition as part of its required understanding of Balfour Beatty's industry, regulatory, and external factors.
• ClientEarth argues that under ISA (UK) 720, KPMG failed to identify material inconsistencies or misstatements by omission in the 'other information' sections of the annual report.

APA

ClientEarth (2018). Audit of Balfour Beatty PLC – climate change-related trends and risks. https://www.clientearth.org/media/q03d1onj/letter-to-kpmg-regarding-balfour-beatty-plc-audit-ce-en.pdf

Chicago

ClientEarth. Audit of Balfour Beatty PLC – climate change-related trends and risks. 2018. https://www.clientearth.org/media/q03d1onj/letter-to-kpmg-regarding-balfour-beatty-plc-audit-ce-en.pdf.

Wikipedia

{{cite press release |author=ClientEarth |title=Audit of Balfour Beatty PLC – climate change-related trends and risks |date=5 September 2018 |url=https://www.clientearth.org/media/q03d1onj/letter-to-kpmg-regarding-balfour-beatty-plc-audit-ce-en.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{clientearth2018audit, author = {{ClientEarth}}, title = {{Audit of Balfour Beatty PLC – climate change-related trends and risks}}, publisher = {ClientEarth}, year = {2018}, month = sep, url = {https://www.clientearth.org/media/q03d1onj/letter-to-kpmg-regarding-balfour-beatty-plc-audit-ce-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }