ClientEarth, an environmental lawyers, have backed the calls of 130 investors to the G20 leaders to be harder on inadequate climate disclosures in corporate reporting.
The investors, representing $13trn in combined assets, want more action from financial regulators to ensure transparent reporting on how climate risk will affect corporations.
Their message comes after ClientEarth alerted the UK financial regulator this week to two oil and gas exploration companies who have failed to adequately disclose climate change risks to their businesses in their annual reports.
Company and Financial Lawyer Alice Garton with international environmental lawyers ClientEarth said:
“Investors need to know what companies are doing to manage climate-related risk. Ultimately, they’ll put their money with those who acknowledge risks and demonstrate they’re planning for them.
“Annual reports like those we flagged to the Financial Reporting Council (FRC) suggest the companies see virtually no business-related risks from climate change. That simply can’t be the case for fossil fuel companies.
“Most G20 jurisdictions require that companies report on material risks to the business. For companies in certain sectors, this clearly includes climate change.
The law is already there. We just need increased vigilance from the regulators to enforce it.
“In the UK, the FRC has the opportunity to do that through acting on our FRC referrals.”