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Shell boss backs G20 call to come clean on climate risks

Jillian Ambrose: 

Royal Dutch Shell boss Ben Van Beurden has joined over 100 major companies to back calls from a G20 taskforce for the world’s largest companies to come clean on the financial impact of climate change.

The task force, set up by the G20’s Financial Stability Board (FSB), is chaired by Michael Bloomberg and aims to cast a light on climate-related financial risk to avoid incubating a future global market shocks by mis-pricing companies and assets.

The world’s largest oil and coal companies, including Shell, are at the heart of these concerns due to their vast reserves of fossil fuels, which could be left stranded if demand for cleaner fuels accelerates faster than expected.

Mr Van Beurden is the only ‘Big Oil’ boss to back the recommendations.

“I believe it is right that it should be transparent which companies are truly on firm foundations over the long-term. The details matter and I look forward to Shell working with the task force on those details. Ultimately, however, both Shell and the task force want these disclosures to be fit for purpose,” he said.

More than 100 companies, with assets worth over $11trn, have committed to support the recommendations of the task force including insurance groups AXA and Aviva, mining group BHP Billiton, as well as HSBC and Barclays.

“Climate change presents global markets with risks and opportunities that cannot be ignored, which is why a framework around climate-related disclosures is so important,” Mr Bloomberg said. “The task force brings that framework to the table, helping investors evaluate the potential risks and rewards of a transition to a lower carbon economy.”

The challenge of reporting on climate-linked preparedness is fraught with complexity and concerns. Chief among these is the risk of disclosing commercially sensitive information. Companies are also concerned about presenting forward-looking information which is subject to myriad uncertain assumptions.

Bank of England Governor Mark Carney, who chairs the FSB, said the recommendations “have been developed by the market for the market”.

The recommendations are voluntary, but some within the 32-strong group have called for mandatory adoption of climate-risk disclosure.

“Widespread adoption will provide investors, banks and insurers with that information, helping minimise the risk that market adjustments to climate change will be incomplete, late and potentially destabilising,” Mr Carney added.


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