LONDON (Reuters) – A letter seen by Reuters showed that investors managing fortunes of more than $2.5 trillion called on governments to compel companies and auditors to provide financial accounts in line with the world’s goal of reducing net worth. carbon emissions to zero.
In a letter to Britain’s climate change official, Alok Sharma, ahead of the next round of global climate talks in Glasgow in November, the investors said doing so was necessary to clarify the financial impact of climate change and give an incentive to invest accordingly.
The group of investors said in the letter, dated September 14, that governments should obligate companies to clarify the financial consequences of the path to reducing net emissions to zero, and to oblige auditors to disclose if companies fail to do so.
This came after a study it recently conducted (the Carbon Monitoring and Climate Accountability Project) that found that more than 70 percent of the largest companies in the world in terms of carbon emissions did not disclose all risks in their disclosures for 2020, and that 80 percent of audits did not show evidence However, the risks have been assessed.
“The majority (companies) continue to use assumptions based on estimates of little or no reduction in carbon emissions, and thus provide financial statements based on governments’ failure to implement their stated commitments and, in some cases, their statutory objectives,” the letter said.
Sharma’s office did not respond to a request for comment.
The upcoming climate conference, called COP26, is seen as the most important ever since governments struck a deal to limit global warming in Paris in 2015.
The investor group said that despite a call by institutional investors managing $100 trillion in assets in September to provide financial accounts in line with the goals of the Paris Agreement, the inaction of companies and auditors meant government action was needed.
Among the signatories to the letter are a body representing Britain’s local pensions, the Swedish Pension Scheme (AB2), and investors including Saracen & Partners.