Climate Change Risk Related Disclosures in Extractive Industries

Baboukardos, D.; Dionysiou, D.; Slack, R.; Tsalavoutas, I.; soligkas, F.

Abstract

Extractive industries (mining, oil and gas) are one of the sectors that are most exposed to changes that governments may be making in order that climate change can be restricted. This report looks at the annual reports of extractive companies around the world to gauge how well and completely they are communicating that exposure to their investors and other stakeholders. The study looks at 60 of the most carbon-intensive extractive companies and at the extent and quality of disclosures they make in the management report and in the financial statements about the potential impact of climate change on their business. Clearly there are risks to the long-term viability of their activities which would impact their mineral or hydrocarbon reserves and the related infrastructure and leave them with ‘stranded’ assets. Overall the findings are that the reporting is not good enough and that annual reports lack clarity of and depth in climate change related disclosures. In the management report (the ‘front end’of the annual report) though most make reference to the issue, not all by any means provide adequate information for example about their reserves, the impact of different climate change scenarios or how their business model is adjusting to the risks. The visible impact on the financial statements is scantier still. Only 10% refer to climate change when considering impairment of their assets and none acknowledge its impact on their estimates of the useful lives of the assets.

Citation

Baboukardos, D., Dionysiou, D., Slack, R., Tsalavoutas, I., & soligkas, F. (2021). Climate Change Risk Related Disclosures in Extractive Industries. Association of Chartered Certified Accountants

• Report Type: Project Report
• Online Publication Date: Feb 24, 2021
• Publication Date: 2021-02
• Deposit Date: Mar 2, 2021
• Publicly Available Date: Mar 3, 2021
• Series Title: Professional Insights
• Public URL: https://durham-repository.worktribe.com/output/1634449
• Publisher URL: https://www.accaglobal.com/gb/en/professional-insights/global-profession/climate-change-risk-related-disclosure-extractive-industries.html
• Additional Information: Publisher: Association of Chartered Certified Accountants; Type: monograph; Subtype: project_report