Carbon content is a key financial element of fossil fuel reserves. In December 2013, Carbon Tracker submitted a letter to the Financial Accounting Standards Board (FASB) suggesting that financial disclosure of carbon content should be required for companies with significant fossil fuel reserves.
In this document, we did not request FASB to pass judgment on the future viability of fossil fuel reserves, but rather, we urged them to recognize the need for disclosure sufficient to permit investors to make this determination for themselves.
Carbon Tracker’s analysis addresses how the requested disclosure:
- improves the usefulness of financial reporting by providing relevant and faithfully represented financial information;
- alleviates a significant deficiency in current financial reporting;
- improves the quality of disclosure with verifiable, timely, and understandable financial information that incorporates the increasing risk to fossil fuel reserve valuation; and
- provides benefits to users of financial information that far outweigh the cost of collection and disclosure.