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 an online survey. With the goal to “assess whether issuers provide appropriate disclosure regarding risks and financial impacts associated with climate change.” Related: OPEC Out Of Moves As Goldman Sachs Expects Another Oil Glut In 2018
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.
Here’s to things heating up.
By Dave Forest
More Top Reads From Oilprice.com:
- OPEC In Trouble As Saudis Becoming Weary Of “Free Riders”
- The Upcoming Surge In U.S. Oil Demand Explained In One Chart
- Tech Miracle In U.S. Shale Is A Media Myth
That isn't a value judgement. It is an economic fact.
My fantasy would be to control Exxon. The government messed with me, and I would shut down every refinery and pipeline I owned. Then sit back and watch the riots after everything stopped within a couple of weeks. Of course, I would need my own nukes, like that North Korean guy. Before long, they would beg me to start up my refineries. I would teach the ignorant that oil is just as important as electricity.
That being said, I think fossil fuel purveyors could be more publicly forthright in acknowledging that their product carries with it problems ... that we need to acknowledge the risks of leaks and intentional burning along with the benefits of burning.
Best yet, burn if we must, but pay for obvious pollution as we go -- not down the road, where our kids pay to correct bad water and air. Should we put a price on carbon pollution and use our marketplace to signal that fossil fuels are becoming a little more expensive, and alternatives to burning are increasingly attractive?
I ask, can fossil fuel companies accept the idea that we value their product, but we would really prefer not to use it?