Big developments this week on a new challenge quickly rising for the energy industry… and beyond.
Climate change reporting.
ExxonMobil lost a key decision in an ongoing climate change battle Wednesday. When a New York judge ordered the oil giant to turn over correspondence from its executives on potential impacts of changing temperatures on the company’s business.
That all comes out of an investigation launched by New York ‘s Attorney General. To determine if oil companies like Exxon have been misleading investors with regards to material business risks posed by climate change.
If the courts find Exxon has been reticent in reporting climate risks, it opens the firm to significant regulatory fines and investor lawsuits. It would also allow regulators and prosecutors to go after other companies across the energy space.
And it isn’t just in the U.S. where climate change reporting is becoming a big issue. Canadian securities regulators also got in on the act this week — announcing the launch of project to examine how well Toronto-listed firms are disclosing their climate risks.
Canadian Securities Administrators (CSA) said Tuesday they will begin gathering information from companies and investors through on online survey. With the goal to “assess whether issuers provide appropriate disclosure regarding risks and financial impacts associated with climate change.”
This is a fairly innocuous beginning. With the regulatory body unlikely to take any action against specific issuers yet.
But it is an opening step in bringing climate change onto the map for Canadian companies. And could lead to stricter reporting requirements, with potentially significant consequences for industries like oil and gas.
CSA said it will gather information through this spring and summer, ahead of publishing findings later this year. Keep any eye out in the second half of 2017 for big changes emerging in reporting for energy companies, and beyond.