Companies examined create 80% of corporate industrial greenhouse gas emissions

LONDON/NEW YORK, 06 OCTOBER – Of 134 multi-national companies responsible for up to 80% of corporate industrial greenhouse gas emissions, 98% did not provide sufficient evidence that their financial statements include the impacts of climate-related matters.

This is one of the findings of the new report Still Flying Blind –The Absence of Climate Risk in Financial Reporting released by the Carbon Tracker Initiative today. The companies surveyed included those from the fossil fuel, mining, manufacturing, automotive and technology sector that are focus companies for the investor led Climate Action 100+ engagement.

The lack of information available to investors is underscored by the fact that none of the companies met all the Climate Action 100+ Climate Accounting and Audit Assessment (CAAA) methodology metric requirements, which includes the analysis of company financial statements. Indeed, only eight, or 6%, received “Partial” scores by providing all the information required by the CAAA methodology for at least one of the seven metrics used to assess them. These companies are BP plc, Glencore plc, National Grid plc, Rio Tinto Group, Shell plc, Eni SpA, Equinor ASA and Rolls-Royce Holdings plc. The remaining 126 companies and their auditors did not meet any of the requirements.

Barbara Davidson, Carbon Tracker’s Head of Accounting, Audit and Disclosure and lead author said:

“Even after adjusting for changes in the methodology since last year and despite some improvements in disclosure, no CA100+ focus company provided all of the information required by the relevant standards or requested by investors. This is despite the fact that most companies operate across a range of high emitting sectors including oil & gas, mining, transportation and industrials.”

“Many asset and liability values rely on forward-looking assumptions.  When companies don’t take climate-related matters into account, their financial statements may include overstated assets, understated liabilities and overstated profits.”

When available, analysts also reviewed audit committee (or equivalent) reports, finding that they often do not mention climate risks. Even when they do, most audit committees fail to consider the impacts of climate-related issues on company financial statements suggesting that audit committees are not providing sufficient oversight on these matters.

Research was performed in collaboration with the Climate Accounting and Audit Project. Researchers also assessed the related external audit reports. They found that, overall, auditors do not appear to comprehensively consider the impacts of material climate-related matters in their risk assessments and audit testing.

In total, 96% of audit reports reviewed did not indicate whether and how they considered the impact of emissions reduction targets, changes to regulations, or declining demand for company products, for example, when auditing these companies.

Only one auditor (Deloitte, for its audit report on BP’s FY2021 financials) provided comprehensive evidence of consideration of climate change and highlighted inconsistencies in BP’s reporting.  Five auditors partially met the requirements under the methodology – for their audits of Glencore and National Grid (Deloitte), Rio Tinto (KPMG), Rolls-Royce (PwC) and Shell (EY).

“Standard-setters and industry regulators already require auditors to consider these matters in their audits.  Auditors have now pledged to the global financial community convened by GFANZ that they will be considering climate-matters in the accounts. They now need to do that and provide sufficient evidence to investors,” said Davidson.

Researchers observed key differences in levels of relevant disclosures. Companies operating in the energy sector cluster continue to score the highest in terms of transparency of reporting. Of the eight companies that achieved partial scores for transparency in financial reporting, five are oil and gas or utilities companies.

The stark differences between audit report information across the same global firm further suggests a lack of network policies to address climate matters. Notably, none of the auditors of the 46 U.S companies provided evidence that they comprehensively considered the impacts of climate matters in such audits.

Although a significant majority had targets or ambitions to achieve net zero by 2050 or sooner, 98% of companies have not aligned the information in their financial statements with achieving this drive. Only three, including Glencore, disclosed relevant climate sensitivities, such as commodity prices used to test for impairments.  These disclosures reflect that companies can incorporate climate-related matters into their reporting.

Rob Schuwerk Carbon Tracker’s U.S Executive Director and report co-author said:

“Glencore’s financial statements are particularly illuminating–they show that in the event of a scenario like the IEA Net Zero Emissions by 2050 Scenario, it would have to write down virtually all the value of its thermal coal assets.  How many more company balance sheets carry similar risks?”

To improve the content and quality of financial reporting of climate matters the report includes the following recommendations:

  • Auditors must provide full transparency around whether and how they addressed material climate-related matters in their audits as required by existing standards and as now expected under auditor commitments on climate;
  • Market regulators should look for reporting inconsistencies, identify audit failures, and take prompt action to enforce financial reporting and audit standards; and
  • Governments and policymakers must prioritise climate accounting matters and ensure that information in the financial statements is consistent with other sustainability information that companies report.


When evaluating companies’ financial statements (and audit reports thereon), we followed the new CAAA methodology and looked for evidence that the following seven metrics had been assessed:

  • The financial statements demonstrate how material climate-related matters are incorporated (Metric 1a).
  • The financial statements disclose the quantitative climate-related assumptions and estimates (Metric 1b).
  • The financial statements are consistent with the company’s other reporting (Metric 1c).
  • The audit report identifies how the auditor has assessed the material impacts of climate-related matters (Metric 2a).
  • The audit report identifies inconsistencies between the financial statements and ‘other information’ (Metric 2b).
  • The financial statements use, or disclose a sensitivity to, assumptions and estimates that are aligned with achieving net-zero GHG emissions by 2050 (or sooner)[1] (Metric 3a).
  • The audit report identifies that the assumptions and estimates that the company used were aligned with achieving net zero GHG emissions by 2050 (or sooner) [2] or provides a sensitivity analysis on the potential implications (Metric 3b).

Once embargo lifts the report can be downloaded here:

To arrange interviews please contact:

Joel Benjamin                                   +44 7429 637423

Dan Cronin                                            1-617-678-5263

Stefano Ambrogi                               + 44 7557916940

Maria Dolben                            +44 7408 809 839

Conor Quinn                               +44 7444 696 214


About Carbon Tracker

The Carbon Tracker Initiative is a not-for-profit financial think tank that seeks to promote a climate-secure global energy market by aligning capital markets with climate reality. Our research to date on the carbon bubble, unburnable carbon and stranded assets has begun a new debate on how to align the financial system with the energy transition to a low carbon future.

About the Climate Accounting and Audit Project

The Climate Accounting and Audit Project is an informal team of accounting and finance experts drawn from the investor community and commissioned by the Principles for Responsible Investment (PRI).


[1] And no more than 1.5 °C warming.
[2] And no more than 1.5 °C warming.