{"id":18382,"date":"2018-10-22T12:08:08","date_gmt":"2018-10-22T16:08:08","guid":{"rendered":"http:\/\/blogs.edf.org\/energyexchange\/?p=18382"},"modified":"2018-10-29T16:39:47","modified_gmt":"2018-10-29T20:39:47","slug":"comprehensive-climate-reporting-must-include-methane-new-report-shows-you-how","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/energyexchange\/2018\/10\/22\/comprehensive-climate-reporting-must-include-methane-new-report-shows-you-how\/","title":{"rendered":"Comprehensive climate reporting must include methane: New report shows you how"},"content":{"rendered":"

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By<\/em>\u00a0Kate Gaumond<\/a>\u00a0and\u00a0<\/em>Sean Wright<\/a><\/em><\/p>\n

Just last month 13 of the world\u2019s largest oil and gas majors\u2014including ExxonMobil, BP and Shell \u2014came together for a new commitment to reducing a key super pollutant. Methane, the primary component of natural gas,\u00a0is the second leading contributor to climate change and over 80 times more potent than carbon when leaked into the atmosphere in the short-term. What\u2019s more surprising? The coalition\u2019s new methane target proceeded despite an uncertain regulatory landscape in the U.S.<\/p>\n

One of 76 recent environmental rollbacks, the Trump administration\u2019s latest move toward undoing common-sense methane regulations is expected by the EPA\u2019s own estimates to allow an additional 480,000 tons of methane emissions. Yet behind the scenes, pressure on industry to transparently reduce emissions is coming from an unexpected source: investors. Investors understand the material risk methane poses their portfolios and have been urging companies to act. Given the lack of current national policy leadership in the U.S., investor pressure on industry to manage climate risks like methane will likely only increase.<\/p>\n

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But investor decision-making around climate issues like methane can only be as good as the information they receive from companies. Mark Carney and Michael Bloomberg, with the support of the Financial Stability Board, set out to tackle this problem. They formed the Task Force on Climate-related Financial Disclosures (TCFD) in 2015 and worked with industry, auditors and investors to write recommendations for consistent and comparable climate-related financial reporting. These recommendations are now supported by over 500 organizations, including mainstream investors like BlackRock and Legal & General, along with major oil and gas companies like BHP, Equinor, Eni, Shell, Suncor and Total.<\/p>\n

However, the TCFD recommendations provide only high-level guidance for climate-related reporting for all sectors, meaning details for industry-specific implementation remain a challenge.<\/p>\n

Methane is uniquely both a product and pollutant, which means these emissions represent a material risk as well as an opportunity for the oil and gas industry. Investors have found current methane reporting inadequate compared to its importance in determining the role gas can play in a low-carbon future. The inconsistency and inaccessibility of information leaves concerned investors in the dark about industry\u2019s plan to manage a major climate risk. Adoption of the TCFD reporting principles in the oil and gas industry is essential for the planet and smart business.<\/p>\n

A new joint report from Ceres, EDF and Principles for Responsible Investment (PRI),\u00a0Setting the Bar: Implementing the TCFD Recommendations for Oil and Gas Methane Disclosure<\/em><\/a>,<\/u><\/em>\u00a0takes the high-level TCFD recommendations, and puts them into discrete questions and metrics for companies to answer, and investors to analyze. Written with input from investors such as Vanguard and Hermes, the report is designed to help companies navigate the implementation of the recommendations by providing guidance on what kinds of information investors are looking for in each of the TCFD\u2019s four categories: governance, strategy, risk management, and metrics and targets.<\/p>\n

For example, the report asks questions, such as the following, for which companies should provide answers:<\/p>\n