ACCA - The global body for professional accountants

Environmental Accountability


This is a valuable and timely thought leadership report on a subject crucial to better business reporting in a carbon-constrained world.

Following Carbon Tracker’s publication of its Unburnable Carbon analyses in 2011 and 2013 (Carbon Tracker 2011; 2013), it has become clear that there are more fossil fuels listed on the world’s capital markets than can be burnt if dangerous climate change is to be prevented. Yet the way in which fossil fuel reserves are accounted for and reported does not factor in the risk that some current reserves may not be combusted. As a result, stock market valuations of these companies, either currently and/or in future, may not be accurate. The world’s stock markets and investors could therefore be facing the risk of a ‘carbon bubble’.

Carbon Tracker and ACCA have come together to explore global reporting practices on fossil fuel reserves and the nature of any information gaps. They sought to answer two questions.

1. To what extent do existing reporting standards governing company disclosures to financial markets require or enable the provision of useful information on fossil fuel reserves?

2. What steps are necessary to integrate emerging and future climate change risks into disclosures?

Published: 7 Oct 2013