According to a Carbon Tracker analysis, businesses in sectors with the highest carbon footprints frequently fail to disclose the dangers that their carbon emissions pose to the financial system.
The nonprofit organisation last year examined 134 corporate financial statements from industries such fossil fuels, mining, manufacturing, vehicles, and technology and discovered that almost all businesses neglected to take the financial impact of climate change into account.
According to a research released on Thursday, auditors frequently overlook the financial concerns associated with emissions.
“Our review focuses on whether companies have considered the impact of climate risk on the elements in the financial statements, not whether they have set appropriate climate targets or even whether they are on track to achieve them. However, we were unable to identify any companies that had provided substantial proof that those risks had been taken into account in the financial statements.
The research also revealed that no business followed all of the disclosure guidelines set forth by the Climate Action 100+ project, an investor-driven campaign to get the world’s largest polluters to take action against climate change.
Energy businesses generally exhibit greater interest than other companies, which is probably due to their close proximity to the energy transition and the increased scrutiny of those companies, according to Schwerk.
The International Sustainability Standards Board is now working to identify models for reporting potential financial impacts from climate and sustainability risks and is anticipated to finish its work within months as part of efforts to develop consistent disclosure requirements.
The data, however, continues to be an issue because a research released in July by the European Union warned investors that estimates of climate change risks may vary, sometimes greatly, depending on which data provider they selected.
Businesses disregard the financial dangers posed by carbon emissions
About Author
