A new report from the Carbon Tracker Initiative says that big global emitters, including Canadian companies, aren’t saying enough about climate change risks in their financial statements.
The report by the climate-focused financial think tank, which looked at 134 companies in a range of industries, says that both companies and auditors are falling short of current accounting standards both when talking about the risks faced and how they determine exposure.
Rob Schuwerk, executive director of Carbon Tracker’s North American office and co-author of the report, says investors are increasingly asking for details on how exposed companies are to climate-related risks, including carbon prices and other regulatory changes.
He says it’s especially important for investors to know how climate-related policy changes could affect assets in the future, noting that early steps at disclosure by mining giant Glencore show that a net-zero scenario results in a near full write down of their thermal-coal-related assets.
Companies such as Suncor Energy Inc. and Teck Resources Ltd. have increasingly acknowledged that policies related to climate change could affect assets, but the Carbon Tracker report says they’re still falling short on details and future projections.
Schuwerk says it’s important for market integrity to have clear numbers and projections around climate risks.
“The whole point of disclosure in the markets is to allow markets to collect and price the risks of particular securities. If those securities are all built on unsustainable assumptions that no one knows, we’re not going to get that effect.”