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Moody’s say businesses slow revealing climate change costs

According to Moody’s Investors Service, US and European businesses in the polluting industries seldom report the financial dangers they face with climate change, although an international task force has asked them.

Moody’s analysis of the public filings on 28 building materials, gas and utilities are based on the recommendation of voluntary disclosures by the Financial Stability Board on the financial impacts of climate change in 2017.

For the Group of 20 nations, the FSB sets financial rules.

Although 80% of Moody’s companies say that climate change affects strategic decisions, only 2 out of 28 have linked their climate projections to the effect of cash flows and balance sheets.

Moody’s report, released on Monday, says that those companies were a European corporation and that they were an American oil and gas company without naming. Credit rating firms used in its study have a total debt of $877 billion. Among others, Exxon Mobil, Royal Dutch Shell, Duke Energy and Eletricite de France.

“Even if companies have made some progress on the level of divulgation, standardised and consistent quantification of the financial impact of climate risk is still in its infancy,” said Vincent Allilaire, one of the report’s authors, in a statement.

Although climate-related information is up to date in general, monitoring quality and depth vary widely, Moody’s says.

Some investors called for corporations to provide better information on how climate change can affect their businesses in the face of the mispricing of capital because of the threat.

Nonetheless, Moody’s described “slow and gradual” universal acceptance of climate-related financial disclosures.

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