Shell Welcomes Climate Transparency Report
Anglo-Dutch major Shell said June 29 it welcomes the final recommendations set out in a report published today by the Task Force on Climate-Related Financial Disclosures (TCFD).
TCFD is a global initiative chaired by media magnate and former New York mayor Michael Bloomberg to get companies across all sectors to assess more clearly and disclose more transparently both the risks and the opportunities presented by climate change. It was set up at the prompting of the G20 and the Financial Stability Board (FSB), itself set up in 2009 by the G20 to promote international financial stability.
Some companies have come under fire for not facing up to the fact that they might not ever produce all their booked reserves of oil and gas at any price. Writing down reserves could hurt their share price.
Shell CEO Ben van Beurden said: “I agree that companies should be clear about how they plan to be resilient in the face of climate change and energy transition. I believe it is right that it should be transparent which companies are truly on firm foundations over the long-term. I applaud the task force for its work to achieve this aim and I have signed a letter confirming Shell’s support for the initiative."
“The details matter and I look forward to Shell working with the task force on those details. Specifically, how we present forward-looking information in an uncertain world, the disclosure of commercially sensitive data and the feasibility of providing the suggested detail to the standard required of financial filings. Ultimately, however, both Shell and the task force want these disclosures to be fit for purpose.”
Bank of England governor and FSB chair Mark Carney said: “The task force’s recommendations have been developed by the market for the market. They set out the disclosures that a wide range of users and preparers of corporate information have said are essential to understanding a company’s climate-related risks and opportunities. 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. I am delighted that Shell is supporting the recommendations and that in so doing, it will bring its considerable expertise to work with the task force to build on, and refine their recommendations over time.”
ExxonMobil case continues
In the US, ExxonMobil remains in the legal spotlight over claims it has misled investors about the effect climate change will have on its business. This month it accused the New York attorney-general Eric Schneiderman of making “inflammatory, reckless and false allegations" when he misstated how ExxonMobil assesses the potential impacts of climate policy on its business in order to justify expanding a politically based investigation with “ever-shifting and unravelling investigative theories.”
Schneiderman is investigating claims that ExxonMobil misled the public over the risks of climate change and has requested information from the company regarding statements it has made on climate change that go back decades.
ExxonMobil said it uses a proxy cost of carbon to assist its assessment of potential impacts of climate-change polices on global energy demand in its annual forecast, the Outlook for Energy. In addition, where appropriate, the company considers the impacts of current and potential future greenhouse gas (GHG) regulations as one of many factors when assessing the economics of individual projects.
“For a prosecutor proceeding in good faith, the absence of any evidence of wrongdoing is grounds for closing an investigation, not expanding it,” said ExxonMobil's lead lawyer, Ted Wells Jr., of Paul, Weiss, Rifkind, Wharton & Garrison LLP.
“Even more frivolous is the attorney general’s claim that it was inappropriate to use the actual cost of carbon … when assessing overall project economics, rather than hypothetical figures. There is no basis in law or logic to find fault for relying on actual costs when available,” added Wells.