Investors demand more thorough disclosure on carbon risks

CalPERS, Ceres and others representing $2 tn in assets ask SEC for greater scrutiny of gas and oil firms

Investors are calling on the SEC to demand more thorough disclosure from oil and gas companies regarding risks related to potential regulations spurred by climate change, competition from renewable energy and weakening demand for fossil fuels.

The group of 65 investors, representing almost $2 tn in assets and co-ordinated by investor advocacy group Ceres, also calls on the regulator to particularly scrutinize the reporting of ExxonMobil, Canadian Natural Resources, Chevron and others. The group wants the SEC to examine the risk of not being able to use some fossil fuel reserves due to measures aimed at slowing global warming.

‘We have found an absence of disclosure in SEC filings regarding these material risks, which constitute known trends under SEC rules,’ the investors write in a seven-page letter addressing SEC chairman Mary Jo White. ‘A growing number of investors are working to integrate climate risk into their investment strategies, and obtaining more information from fossil fuel companies about their capital expenditures and related risks is a critical part of this process.’

The letter says Canadian Natural Resources has devoted more than 50 percent of its capital expenditure to ‘high-risk, carbon-intensive projects’, while ExxonMobil offers ‘virtually no information about carbon asset risks’. Chevron ‘did not disclose the trend toward increasingly high-cost, carbon-intensive oil and gas exploration projects nor other information investors require about carbon asset risks’ in its latest filing, the group adds.

Investors signing the letter include Trillium Asset Management, CalPERS, Green Century Capital Management, Seattle City Employees’ Retirement System, the Washington State Investment Board, the Rockefeller Brothers Fund and the treasurers of the US states of Massachusetts, Oregon, Vermont and Washington.

The letter was filed a day after BP adopted a shareholder resolution in support of more complete disclosure of carbon asset risks. Ninety-eight percent of shareholders backed a resolution committing the company to publish more information on carbon emissions, the likely impact of any measures to combat global warming and the linking of CEO pay to greenhouse gas emissions, among other issues.

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