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Biggest polluting firms not able to disclose climate risks: study reveals

Biggest polluting firms not able to disclose climate risks: study reveals

Biggest polluting firms not able to disclose climate risks: study reveals

Credits: nirutft/stock.adobe.com

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  • Carbon Tracker: 98% of firms responsible for up to 80% of CO2 emissions fail to disclose risks.
  • Carbon Tracker is a think tank that analyses the impact of climate change on financial markets.
  • Global regulatory organizations want firms to increase their disclosure of climate-related risks and impacts.
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According to research published by Carbon Tracker on Thursday, nearly all of the corporations most responsible for corporate greenhouse gas emissions are failing to disclose how climate risks may affect their finances.

The absence of disclosures leaves investors in the dark and prevents markets from efficiently allocating capital, according to Carbon Tracker, a think tank that analyses the impact of climate change on financial markets.

In its second annual report on corporate disclosures, it found that 98% of 134 firms responsible for up to 80% of emissions did not offer sufficient proof that they considered climate issues while compiling their 2021 financial statements.

“When companies don’t take climate-related matters into account, their financial statements may include overstated assets, understated liabilities, and overstated profits,” said Barbara Davidson, the head of accounting, audit, and disclosure at Carbon Tracker and the report’s lead author.

The report indicated that auditors fail to evaluate climate-related problems.

Almost all audit reports analyzed by Carbon Tracker did not indicate whether or how they consider the impact of emissions reduction objectives, changes in laws, or a decline in product demand.

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Global regulatory organizations want firms to increase their disclosure of climate-related risks and impacts in order to encourage investors to invest in initiatives to achieve net zero emissions by 2050.

Carbon Tracker said that progress had been made, demonstrating that adequate disclosure was attainable.

For instance, Glencore had submitted pertinent facts in line with its goal of achieving net zero emissions by 2050.

“Glencore’s financial statements are particularly illuminating — they show that in the event of a scenario like the IEA Net Zero Emissions by 2050, it would have to write down virtually all the value of its thermal coal assets,” said Rob Schuwerk, executive director of Carbon Tracker in the United States.

“How many more company balance sheets carry similar risks?”

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