Climate risk disclosures by companies in the oil and gas, and coal sectors

ClientEarth and partners argue that climate change poses material financial risks to fossil fuel companies, potentially rendering a significant portion of reserves 'stranded'. They call on ESMA to enforce consistent regulatory reporting of these risks under the Transparency and Accounting Directives, aligning with global efforts like the Task Force on Climate-related Financial Disclosures.

• The Paris Agreement's goal of limiting global warming to well below 2ºC necessitates a carbon budget that severely restricts the amount of fossil fuels that can be burned, which will drastically reduce demand and lower commodity prices.
• A significant portion of existing fossil fuel reserves may become 'stranded' and uneconomic; specifically, one study suggests that to have a 50% chance of limiting warming to 2ºC, over 80% of coal reserves, half of gas reserves, and one third of oil reserves should remain unused.
• Climate risk represents a material financial threat to fossil fuel companies, with potential value at risk for some firms reaching 40-60% of their market capitalisation in a 2ºC scenario.
• Under the Transparency Directive and Accounting Directive, fossil fuel companies are required to disclose climate risk in their management reports as it constitutes a 'principal risk' and a material environmental matter necessary for understanding the company's performance and future development.
• Large public companies must include climate risk and the company's response within their non-financial statements, as climate change is a material environmental, social, and human rights matter and a direct impact of their activities.
• There is increasing global regulatory scrutiny on climate disclosures, evidenced by the US SEC guidance, the New York Attorney General's investigations into Peabody Energy Corporation and Exxon, and the UK Financial Reporting Council's communications to listed companies.

APA

ClientEarth (2016). Climate risk disclosures by companies in the oil and gas, and coal sectors. https://www.clientearth.org/media/ltbpeivp/2016-01-21-letter-to-esma-on-climate-risk-disclosures-by-companies-in-the-oil-and-gas-and-coal-sectors-ce-en.pdf

Chicago

ClientEarth. Climate risk disclosures by companies in the oil and gas, and coal sectors. 2016. https://www.clientearth.org/media/ltbpeivp/2016-01-21-letter-to-esma-on-climate-risk-disclosures-by-companies-in-the-oil-and-gas-and-coal-sectors-ce-en.pdf.

Wikipedia

{{cite press release |author=ClientEarth |title=Climate risk disclosures by companies in the oil and gas, and coal sectors |date=21 January 2016 |url=https://www.clientearth.org/media/ltbpeivp/2016-01-21-letter-to-esma-on-climate-risk-disclosures-by-companies-in-the-oil-and-gas-and-coal-sectors-ce-en.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{clientearth2016climate, author = {{ClientEarth}}, title = {{Climate risk disclosures by companies in the oil and gas, and coal sectors}}, publisher = {ClientEarth}, year = {2016}, month = jan, url = {https://www.clientearth.org/media/ltbpeivp/2016-01-21-letter-to-esma-on-climate-risk-disclosures-by-companies-in-the-oil-and-gas-and-coal-sectors-ce-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }