Of the 134 multinational companies responsible for up to 80% of corporate industrial greenhouse gas emissions, 98% failed to provide sufficient evidence on the impacts of climate-related issues.
That’s one of the findings of a new report, “Still Flying Blind – The Absence of Climate Risk in Financial Reporting,” released Thursday by the Carbon Tracker Initiative.
Companies interviewed included those in the fossil fuel, mining, manufacturing, automotive and technology sectors that are target companies for the investor-led Climate Action 100+ commitment.
The lack of information available to investors is underscored by the fact that none of the companies has met all of the requirements of the Climate Action 100+ Climate Accounting and Audit Assessment (CAAA) methodology, which includes analysis of statements corporate finance.
Indeed, only 6-8% received “partial” scores by providing all of the information required by the CAAA methodology for at least one of the seven measures used to assess them.
The remaining 126 companies and their auditors failed to meet any of the requirements.
Barbara Davidson, Carbon Tracker’s Accounting, Auditing and Disclosure Manager and lead author, told IANS: “Even after adjusting changes to the methodology since last year and despite some improvements of the disclosure, no CA100+ Targeted Company provided all the information required by the relevant standards or requested by investors.
“This despite the fact that most companies operate in a range of high-emissions sectors, including oil and gas, mining, transport and industrials.”
“Many asset and liability values are based on forward-looking assumptions. When companies fail to take climate-related issues into account, their financial statements may include overvalued assets, undervalued liabilities and overvalued earnings.”
When available, analysts also reviewed reports from the audit committee (or equivalent), finding that they often did not mention climate risks. Even when they do, most audit committees fail to consider the impacts of climate-related issues on corporate financial statements, suggesting that audit committees are not providing sufficient oversight on these issues. Questions.
The research was carried out in collaboration with the Climate Accounting and Audit Project.
The researchers also assessed related external audit reports. They found that auditors do not appear to comprehensively consider the impacts of material climate-related issues in their risk assessments and audit testing.
A total of 96% of the audit reports reviewed did not indicate if and how they considered the impact of emission reduction targets, regulatory changes or reduced demand for the company’s products. company, for example, when auditing these companies.
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