Claim: Businesses Losing Interest in Climate Reporting
Guest essay by Eric Worrall
The Australian corporate regulator has warned of a substantial decline in the number of businesses including climate impact statements in their company reports.
‘Worrying’: Companies’ reporting of climate risks goes ‘backwards’
By Ruth Williams
20 September 2018 — 4:11pm
The number of companies providing information about climate change and its risks in their annual reports has fallen dramatically since 2011, and information that is provided is often “fragmented” and of limited use to investors, the corporate regulator has found.
The Australian Securities and Investments Commission (ASIC) examined the 2017 annual reports of 60 companies in the ASX300, of which just 17 per cent disclosed climate change as a “material risk”. Outside the top 200 companies, climate risk disclosure was “very limited”.
ASIC then examined 15,000 ASX-listed company annual reports dating back six years and found that the proportion containing climate risk and climate-change-related content had dropped from 22 per cent in 2011 to 14 per cent – probably due to the existence and then repeal of the Gillard-era emissions trading scheme legislation.
I suspect part of the problem might be the difficulty of quantifying the impact of climate change, based on seriously poor quality climate predictions.
the IPCC (AR5) suggests that climate sensitivity is between 1.5C / doubling of CO2 to 4.5C / doubling of CO2, though they qualify this range by suggesting climate sensitivity is extremely unlikely to be lower than 1C / doubling or higher as 6C / doubling (see page 871).
How is anyone supposed to work with garbage numbers like that? Even climate action advocates admit the imprecision of climate predictions creates serious problems for anyone trying to determine the real world impact of ongoing CO2 emissions. Setting aside for a moment the issue of whether CO2 is actually a problem, the following quote from The Carbon Brief explains some of the problems encountered when attempting to estimate the remaining global carbon budget.
… In this article, Carbon Brief assesses nine new carbon budget estimates released by different groups over the past two years. Most show larger allowable emissions than were featured in the last IPCC report. A number of studies suggest that carbon budgets estimates based on ESMs may be on the low side as a result of limitations with how some models represent the carbon cycle.
However, there is still a wide range of variation in these new carbon budgets, arising from differences in approaches, timeframes, estimates of warming to-date and other factors. Recent studies suggest the remaining carbon budget to limit warming to “well below” 1.5C might have already been exceeded by emissions to-date, or might be as large as 15 more years of emissions at our current rate.
Imagine for a moment you are the chief auditor of a coal company. What would you write in your company report?
There are so many conflicting signals. Demand is surging – Japan and China are competing with each other to finance thousands of new coal plants throughout Asia and the developing world. Some influential research groups claim you have already destroyed the world and should be shut down immediately. Other groups claim you should be allowed to operate for another 15 years. Some politicians claim your business is wrecking the planet, other politicians champion your business as the saviour of the national economy. To add to the fun, many high profile climate predictions such as Al Gore’s ice free arctic prediction have simply failed to occur.
Remember if you get it wrong, you might be sued, or in extreme circumstances you might even go to jail. Misleading investors is potentially a serious offence. As company auditor, the buck stops with you. Scientists might be able to get away with meaningless butt covering climate sensitivity ranges, but as company auditor you are supposed to provide concrete information which can be used as a sound basis for investment decisions.
Easier not to say anything about climate risk, or to say something vague and meaningless which can’t be used as a reason to sue you if you get it wrong.
via Watts Up With That? https://ift.tt/1Viafi3