A lack of detail in financial reporting will dramatically reduce firms’ chances of meeting global emissions targets, researchers have warned amid persisting climate risks.
There is no way of knowing if money is being put into sustainable activities, Carbon Tracker said.
Firms also need to be more transparent as to how they will hit sustainability targets, the think tank said.
But the International Energy Agency said firms should not have to focus on “ticking boxes for activists”.
In a study of 107 global businesses working in carbon-intensive sectors, researchers said there is a “glaring absence of climate risks in financial reporting”.
More than 70% of the companies studied fail to include their climate impact in their financial statements.
Plans for net zero targets and limiting climate risks were also omitted.
Eight out of 10 audits of these firms also showed no evidence of assessing climate risk.
Researchers assessed the 202 financial statements of 107 listed companies, from oil and gas firms to construction, car manufacturers and aviation businesses.
The study, conducted by the independent charity group-funded Carbon Tracker and the Climate Accounting Project (CAP), said the lack of detail in their financial reporting will dramatically reduce the chances of meeting global emissions targets.
“The fact that we don’t have transparency means we have no idea if capital is being allocated to sustainable activities so we can actually transition to a greener future,” Barbara Davidson, analyst at Carbon Tracker and lead author of the report, told the BBC.
Researchers also found that none of the accounts reflected aims set by the Paris Agreement – an international treaty on climate change which aims to limit global warming to no more than 1.5 degrees Celsius.
