Fossil fuel companies hold vast oil, gas and coal reserves that help determine their market value. These reserves are also the basis to understanding the potential climate risks of burning these fuels. Yet not a single fossil fuel company in the world discloses potential emissions from their reserves — and that is a big problem.
This emissions information is important for investors, as well as the broader public, to understand the risks to these companies and the planet. Research shows that a large portion of the world’s fossil fuel reserves will have to be left in the ground if we are to avert the most dangerous impacts of climate change. And the Financial Stability Board — the 20 most powerful central bankers and finance ministries in the world — Wednesday released a landmark report which calls for companies to disclose climate-related risks, both financial and physical.
Part of the challenge for fossil fuel companies is that until now there hasn’t been a consistent, credible methodology for them to calculate their potential emissions. Today, WRI launched the first-ever comprehensive methodology to measure and report potential emissions from oil, gas and coal reserves.
Companies owe it to their investors and to the public to use this new guidance and reveal the potential impacts of their reserves. There are three reasons: