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Through our Still Flying Blind series, our team have successfully raised awareness among key market players, including regulators and auditors, about the importance of addressing climate risk in financial reporting. In 2022, we published an update to our 2021 report, Flying Blind: The glaring absence of climate risks in financial reporting, which has received significant attention and positive feedback from stakeholders. The updated report expanded our coverage to 134 highly carbon-exposed companies. These companies are a subset of the CA100+ companies, and span across various sectors and geographies. Related to this work, we also wrote the Climate Action 100+ methodology for assessing the new climate accounting and audit indicator (as part of the CA100+ Benchmark).


Since the publication of Still Flying Blind and the success of the Climate Accounting Dialogue panel at COP 26, we have seen increased interest from regulators. Globally, we are the only ones doing this type of work on financial statements. This has resulted in requests for us to participate in webinars, meetings with industry players, and to produce webcasts. We subsequently presented our findings at New York Climate Week and COP 27, with further participation in the Net Zero Finance and Disclosure Working Group.


In 2022, we saw our reach and influence continue to grow. Our ground-breaking Still Flying Blind series has been a catalyst for change in the financial industry, driving regulators and auditors to recognise the importance of addressing climate risk in financial reporting. The Financial Reporting Council (FRC) released a report on What makes a good Annual Report and Accounts, utilizing our analysis to provide insights and guidance for companies seeking to enhance their financial reporting. Our research has also influenced the Financial Conduct Authority (FCA), which used our reports, including Still Flying Blind and Unburnable Carbon: Ten Years On to make critical decisions and promote sustainable financial practices. Furthermore, our engagement with the Public Company Accounting Oversight Board (PCAOB) led to the creation of a specialised inspection team, ‘The Target Focus Team,’ focusing on climate change and energy transition in 2022 financial reporting.


In a landmark achievement, the U.S. Securities and Exchange Commission (SEC) proposed rules to disclose climate risks to investors in their filings, a direct result of our research and engagement in the field. SEC Commissioner Caroline A. Crenshaw lauded Still Flying Blind as “the best piece of advocacy” in her decade-long tenure at the Commission, underlining the report’s effectiveness in driving change and progress within the industry. Our research has also led to updates on auditor requirements in Japan, resulting in clearer and more defined responsibilities, and influenced major companies such as BP and Deloitte to address inconsistencies in their financial statements and audit reports. Our analysis also spurred ExxonMobil and Chevron’s investors to advocate for fossil fuel transition audits, underlining the remarkable impact our research has on shaping industry practices on climate risk disclosure.


We also presented our findings to representatives from the Securities and Exchange Commission, the Public Company Accounting Oversight Board, the European Securities and Markets Authority, and relevant national enforcers. Companies such as Eni, Shell and Glencore reached out to us to discuss investor resolutions. Deloitte and EY invited us to speak with them about specific company assessments. Our team has engaged with Universities (Surrey and Bocconi), as well as training courses such as GARP (Global Association of Risk Professionals). In 2023, we anticipate continued interest from these actors in 2023 These engagements demonstrate the importance of our research and our commitment to improving transparency and disclosure in the financial industry.

Looking Ahead to 2023

We will continue to emphasise that if there is a continued use of oil (and gas) for power, the longer-term financial impacts of climate-related risks must still be reflected in current financial statements. Even in the face of growing oil and gas prices, this is a significant financial risk that cannot be ignored in financial reporting despite short-term activities/windfalls for oil and gas and other companies. Greater Net Zero commitments mean that companies will have to provide more evidence of how achieving these targets/goals will impact existing financial positions (invested capital). Increased regulatory pressure also adds weight to our work towards consistency in climate reporting by auditors. As disclosures start to improve, we will expand the scope of our review to show levels of progress, and highlight leaders and laggards in transparency of reporting, by both companies and investors - enabling more effective, more targeted engagement and voting

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