Financial statements, like economic models, are only as good as the inputs to them.
Inputs  underpin the information in company financial accounts and drive the value of assets and liabilities, as well as profitability. Many of these inputs can be significantly impacted by climate matters, including the energy transition. Ignoring such impacts could potentially hide “stranded assets”.
The objective of this note is to demonstrate the range of information that investors are actually receiving from oil and gas (O&G) companies about the prices they used to prepare their financial statements and the potential financial impacts of the energy transition, including achieving net zero by 2050, on their productive assets. We analyse the disclosures made by select EU/UK O&G companies, with particular attention on the projected oil prices that they use to test their productive assets for impairment.