U.S. and European firms in polluting industries rarely disclose the financial threats they face linked to climate change even though a world task force asked them to do so two years ago, Moody’s Investors Service stated in a report on Monday.
The evaluation of the public filings of 28 building supplies, oil and gas, and utility firms comes after the Financial Stability Board’s Task Force on Climate-linked Financial Disclosures in 2017 recommended voluntary declaration by companies of the financial impact of the climate crisis.
The FSB coordinates financial guidelines for G20 nations.
Although 80% of the companies in the Moody’s pattern said climate change was affecting strategic choices, simply two of the 28 connected their climate projections with an impact on money circulations and balance sheets, the report showed.
These firms had been a European utility and U.S. oil and gas firm, the report stated without giving names. Corporations the credit scores service used in its evaluation has a mixed $877 billion of debt. They included Exxon Mobil, Royal Dutch Shell, Duke Energy, and Eletricite de France, amongst others.
While climate-associated disclosures overall are up, the quality and depth of reporting vary broadly, Moody’s stated.
Many traders have called on firms to provide better information on how the climate crisis could impact their services amid concerns that assets are being mispriced since the risk is not being factored in.
However, Moody’s characterized the widespread adoption of climate-associated financial disclosures as “slow and gradual.”