Investors tell European firms to reveal 'missing' climate costs in their accounts
(Reuters, 16 Nov 2020) Investor group, managing $9 trillion in assets, wants carbon-heavy companies to set out how they should account for likely impact of Paris climate accord on future profits.
Investors are pushing major European companies to make sure the "missing" costs of climate change are properly reflected in their financial statements, a move that could wipe billions of dollars off the value of sectors from energy to aviation.
The European and U.S. investors, who manage $9 trillion in assets, have sent 36 carbon-heavy companies a document setting out how they should account for the likely impact of the 2015 Paris climate accordon their future profits.
The investors suspect that existing balance sheets rest on assumptions over variables such as oil prices, carbon taxes, and the lifespan of fossil fuel assets that are incompatible with a shift to net-zero carbon emissions under the Paris deal.
JPM Morgan Asset Management (part of JP Morgan Chase & Co), DWS, Fidelity International and M&G Investments were among 38 asset managers to back the document, according to a copy of an accompanying letter shared with Reuters by the Institutional Investors Group on Climate Change, an industry coalition.