• Economic Research
  • Responsible Investing
  • ESG

Counting emissions and accounting omissions

The struggle to measure, monitor and manage corporate net-zero efforts

Internalise the climate externality. That is the major task facing policymakers and corporate executives. However, this requires accurate measurement and incorporation into financial accounts and neither are straightforward.

Imagine daytime temperatures so hot that roads melt, pets taking a walk damage their paws and opening a car door could mean a severe burn. For residents of California, that moment has already arrived. The daytime temperature reached over 50 degrees Celsius in Palm Springs in June 20211, enough to cook the white of an egg on a pavement. In this explosive heat, human health and ecosystems are at risk.

Meanwhile, efforts continue to capture information better, within the natural world and the financial one that underpins flows of capital. Can accountants really save the world, as Peter Bakker, CEO of the World Business Council for Sustainable Development, audaciously suggested?2 Might new ideas like sustainable cost accounting force companies to address climate targets? Or will the failure to monitor, record and respond to the climate emergency ultimately prove disastrous for us all?

Figure 1: Surviving the furnace3
Surviving the furnace
Source: Yale Climate Connections, July 13, 2021. Aviva Investors, October 2021

Measuring emissions

A good place to start is to take a hard look at what we know. Take the carbon cycle, the backbone of life, which links an astonishing range of organisms and processes.

“It includes every plant, animal and microbe, every photosynthesising leaf and fallen tree, every ocean, lake, pond and puddle, every soil, sediment and carbonate rock, every breath of fresh air, volcanic eruption and bubble rising to the surface of a swamp, among much, much else,” according to an introduction to carbon by the University of New Hampshire.4 Within that complexity there are stores or sinks and fluxes that transfer carbon from one pool to another. The cycle encompasses “nearly everything”.5

Frustratingly, our knowledge of “nearly everything” is detailed in parts, but thin in others. For example, just over a decade ago researchers were contemplating where around one billion tonnes of warming carbon dioxide (CO2) might have gone. “They looked for it here and they looked for it there, but the carbon had vanished into thin air,” wrote science writer Jane Burgermeister in 2007, keen not to miss a catchy line.6

Scientists assumed some of the carbon being produced by human activities – burning fossil fuels, removing virgin forest and introducing modern commercial agriculture – had been sequestered by trees in the vast boreal forests in northern latitudes. This was not the case; the ‘lost’ mass was later found in tropical zones.

Most tropical rainforests are not closely observed on the ground

Most tropical rainforests are not closely observed on the ground. Building an overview involves taking a small amount of experimental data and marrying it with information from ecosystem models and satellite imagery.7 As a result, many of the estimates are inexact, as they are with many forms of natural capital, which has implications for how human actions and consequences are assessed.

Forests are some of the more closely monitored ecosystems; other landscapes – like African agricultural systems – are “data deserts”8 in comparison, according to Todd Rosenstock, an environmental scientist at World Agroforestry, responsible for investigating greenhouse gases (GHG) measurement protocols from Nairobi, Kenya.

“Measurements of nutrient stocks and GHG fluxes are typically collected at very local scales (less than one to 30 metres square) and then extrapolated to estimate impacts at larger spatial extents – farms, landscapes, or even countries,” he explained in a book published in 2016.9

But that’s not all. Knowledge of the extent of GHG-producing agricultural activities is patchy too. The data gaps are “staggering,” he says, contributing to “an extraordinary blind spot” in GHG accounting.

We need to talk about methane

If one billion tonnes of carbon can be ‘lost’ when stored in tangible form, how much greater is the challenge with invisible carbon compounds?

Take methane, for instance, the primary constituent of natural gas and a major contributor to human-induced climate warming. It is covered by the GHG protocol10, the global standard used by companies seeking to monitor and manage their environmental trajectories better. There are many natural sources of methane, including paddy fields that feed half the world’s population, cattle and melting permafrost, but human-energy systems offer a route to address climate warming, fast.

The most cost-effective thing we can do to bring down temperatures in the near term is focus on methane

“The most cost-effective thing we can do to bring down temperatures in the near term is focus on methane,” according to Fred Krupp, president of the Environmental Defence Fund, the NGO seeking environmental solutions with the likes of oil majors like Shell and BP.11 “Methane is 34 times more potent than CO2 over 100 years. It turns out methane doesn't last 100 years; it lasts less than 20 years. Over that period, it's over 80 times more powerful than CO2. When you reduce methane emissions, you can have an outsized effect on reducing the temperatures we're going to see over the next 20 years.”

Methane is difficult to detect. In the field, it needs specialist equipment, like quantum cascade lasers and spectrometers12, to assess its concentration in the air. It can be dispersed by wind and oxidise (from methane (CH4) to CO2 and water (H2O)). It’s invisible and odourless, so it can stay out of sight and out of mind. (See Figure 2 for atmospheric methane levels.)

Figure 2: Atmospheric methane reaches highest level since systematic records began (CH4 mole fraction)13
Atmospheric methane reaches highest level since systematic records began
Source: NOAA Research News, April 7, 2021

Recent monitoring suggests a significant amount of methane is being emitted from energy networks. It includes gas released deliberately (vented, to reduce the dangerous build-up of pressure within infrastructure networks, or flared, burnt to convert emissions to CO2) or inadvertently seeping out through leaks. A global trawl of satellite imagery in 2020 showed about 100 ‘super-emissions’ events taking place at once, each generating as much CO2 as a 750-MW coal power plant (see Figure 3.)

Figure 3: Using satellite data to identify methane plumes (estimated rate 91/th)14
Using satellite data to identify methane plumes
Note: Plume of methane as seen on Sentinel 5P around Hassi Messaoud, Algeria, on January 4, 2020, matching Sonatrach's reported event. Methane concentrations are in parts per billion. Arrow indicates the wind direction.
Source: IEA, March 31, 2020

“When companies go out to drill a well, natural gas and methane will always be part of it. There aren't any wells drilled that don't have any gas or methane in them,” explained Gretchen Watkins, US president of the Shell Oil Company in a recent industry discussion on fugitive methane emissions.15 “If you drill a well in a place where there aren't existing pipelines or existing infrastructure, it’s very difficult to capture the gas and do something with it.”

Gas can also leak from various points across energy and petrochemical infrastructure, from the wells themselves to processing plants and surface storage stations. Figuring out where gas is escaping is a scientific and measurement challenge. But the International Energy Agency believes simply using industry best practice could trim total human emissions by 15 per cent, at comparatively low cost.16

Costing the Earth?

As is often the way, probing into where human-induced emissions are coming from has introduced new complexities.

On average, two per cent of what is coming out of the ground is going into the air

“We know from US oil and gas field submissions that, on average, two per cent of what is coming out of the ground is going into the air,” Krupp says. “In the Permian basin in the US, one of the biggest oil fields globally, we learnt very recently that (network) emissions are three to five times higher than what is being reported. The number is closer to 3.7 per cent.”

Some historic studies put emissions higher still. While findings vary according to the nature and age of installations, the top end of the range reported by the National Oceanic and Atmospheric Administration, the US government agency, is more than twice the level mentioned by Krupp (illustrated in Figure 4).

“Just let me just take a second to explain the significance of that,” Krupp adds. “When we have two per cent leakage, burning natural gas is only slightly better than coal. With 3.7 per cent leakage, burning natural gas is substantially worse….”. Listen to Krupp speaking in a panel discussion here.17

Figure 4: Fugitive methane emissions: Assessing scale (per cent)18
Fugitive methane emissions: Assessing scale
Source: Carbon Brief, July 3, 2014. Aviva Investors, October 2021

This is not just a US problem; Europe has issues with fugitive emissions too. Surveys by the non-profit Clean Air Task Force (CATF) showed more than 90 per cent of the sites monitored in the Czech Republic, Hungary, Italy, Poland and Romania leak notable amounts of methane. In Germany and Austria, the record was better.19

Data discrepancies: Top-down versus bottom-up

These data points are alarming for those keen to present natural gas as a (comparatively) attractive transition fuel. No wonder energy majors are putting their weight behind methane monitoring initiatives with a view to protecting their social license to operate.20

Meanwhile, as multiple stakeholders grapple with their measurement challenges, there are significant discrepancies between emissions profiles built in different ways. The view from the bottom-up, from individual samples at point sources, and aerial overviews, from aeroplanes and drones, may be quite different. 

It is really challenging to measure the release of some GHG emissions

“It is really challenging to measure the release of some GHG emissions,” agrees Emily Kreps, global director of capital markets at CDP, the non-profit body helping organisations measure and address their environmental impact. “China talked about it before the coronavirus triggered a global health crisis and mentioned using sensors comprehensively to quantify when gas is released. But global industry is far removed from that. Even when data is taken from satellite monitoring, it is not necessarily clear.

“What we are most likely to see is a logical build-up of data from the bottom-up, based on the operation of this plant or this business process,” she adds. “We can anticipate what happens when we run a process for X number of minutes or hours or days. We are not working at the very granular level yet in terms of measurement, although it is hard for the financial sector to accept that.”

So, unanswered questions abound. Although there is a formal GHG recording protocol in place and agreed units of measurement, we do not know precisely how much warming gas is being emitted from human energy systems, or from where. Equally, we don’t know the quantity of warming gases natural systems are emitting or sequestering, or where.

Accounting omissions

Accountancy finds itself at the coal face of this confusion, charged with producing meaningful financial statements that increasingly bring once-considered non-financial disclosures onto the balance sheet. The challenge is doing it in a way that fairly represents what is going on. The rules that guide the industry are negotiated in a particular social environment; their purpose is to underpin the allocation of capital and reflect the views of the time.

More companies are choosing to “go off the accounting piste” in certain jurisdictions

Before environmental concerns loomed large in the societal register, those overseeing the industry were grappling with how to capture the change from industrial economies to an information age. The change has been messy, with more companies choosing to “go off the accounting piste” in certain jurisdictions, deviating from industry norms.21 “Accounting has become the opposite of useful for users,”22 noted an article in the Financial Times in 2019, pointing to the number of US companies using bespoke approaches in earnings releases.

Already facing the monumental task of incorporating intangible assets into financial accounts, which has led to a widening gap in industry norms and outputs, they now face an even bigger challenge: assessing the change implied by the Paris Climate Agreement. The accountancy profession is having to ask big questions of itself. Are established concepts – like materiality and prudence – leading to meaningful assessments of risk? Or could the patchwork of reporting requirements fail to communicate the risks implied by the climate transition?  

These conflicts are already familiar to many users of financial reports and accounts, including professional investors. There are now some obvious gaps between the narratives in the front end of the reports, where climate risk is mentioned a lot, and the sparse data appearing in the back end in the audited accounts. This makes the work of the professional investment community much harder.

Investment research is about gathering information from multiple sources, verifying, triangulating

“I think of investment research as detective work,” Nick Anderson, a former buy-side investor and current senior member of the International Accounting Standards Board (IASB) told a panel discussing accounting for climate recently. “It’s about gathering information from multiple sources, verifying, triangulating … It’s about forming judgements based on that evidence, and then using your experience to reach a view.”23

In that process, the information included in audited reports is pivotal. Investment analysts are always asking whether the messages they are receiving are coherent and consistent. Any dissonance or information gaps could be costly, hence the pressure from the investment community for more transparency. But these tensions are not yet being addressed. Nevertheless, various professional bodies (including the IASB and the International Auditing and Assurance Standards Board (IAASB)) suggest there is no need for radical re-thinking. They say established accounting principles already capture what is needed to get climate risk reflected on the balance sheet.

“IFRS standards do address climate-related risk,” Anderson insists. “They do that through the requirements of specific standards, and the overriding requirements of International Accounting Standard (IAS) 1, relating to the disclosure of material information. Many of these requirements have been in place for years.” He flags the standards in Figure 5 as particularly vital to consider through a climate lens, using assumptions compatible with achieving the Paris Agreement.

Figure 5: Capturing climate risk in IFRS standards
Capturing climate risk in IFRS standards
Source: IASB, November 2020

Focus in these areas is likely to generate lots of questions, according to David Pitt-Watson, executive fellow at Cambridge University’s Judge Business School and former co-chair of the UNEP Finance Initiative.

“In the short term, there will have to be write offs if we have been valuing climate-exposed assets as though there is no climate issue,” he says. “That’s the right thing to do, just as it is the right thing to write off a bad loan rather than pretend an organisation is solvent.”

Auditors need to be framing climate risk in a way aligned with achieving the Paris Agreement, and sensitive to recent industry guidance. “They [the accountancy bodies] want to see both the issuer and the auditor follow the letter and the spirit of the opinions of the IASB and the IAASB,” adds Pitt-Watson.

Bringing carbon onto the balance sheet

Meanwhile, deeper questions are being asked about the philosophy driving the metrics themselves. Who are accounts for?

“The International Financial Reporting Standards Foundation (IFRS) suggests that accounts are primarily for the benefit of investors,” says Richard Murphy, professor of accounting at Sheffield University Management School and founder of the Corporate Accountability Network, an NGO established in 2019 to target the “the weaknesses in the accounting disclosure of all companies” so they meet the needs of all stakeholders, not just those providing their capital.

“Implicit within that is a purely financial capital maintenance concept,” adds Murphy. “That’s what the IFRS metrics are all about. There is an amount on the balance sheet for this year which can be compared to last year, and so on. The making of profit, the creation of financial capital, is the priority.”

The financial capital maintenance concept creates a perverse incentive to exploit natural capital

Murphy believes the approach is fundamentally inconsistent with sustainability because the financial capital maintenance concept creates a perverse incentive to exploit natural capital. If a resource is not properly valued, it will tend to be overused, and then scarcity forces values higher in the interests of a powerful minority. But the climate emergency needs a universal approach since we only have one planet. Instead, Murphy suggests maintaining environmental capital should be the primary goal for the long-term benefit of society.

“While financial capital is important, it's secondary compared to the requirement for businesses to operate within the environmental constraints imposed upon them by the greater goal of achieving sustainability, aligned with the Paris Agreement,” he says.

This is effectively the accountancy version of the conversation around the purpose of a corporation. Should companies be purely driven to create profit, or should greater attention to be given to balancing that goal with wider environmental and social concerns?

Murphy suggests the IFRS Foundation is now contributing to an environment where one set of rules regulates financial accounting and another complex set of (mainly voluntary) guidelines shape sustainability reporting, broadly based around on the framework set out by the Task Force on Climate-related Financial Disclosures (TCFD). This view of the world, where sustainability reporting has only tenuous links into the accounting system, makes it possible for difficult climate-related decisions to be deferred.

Figure 6: Accounting systems as windows on the world24
Accounting systems as windows on the world
Source: Tax Research UK, December 8, 2020

For now, the climate externality is only partially addressed via carbon pricing and there is no explicit mechanism to hold corporate actors to account regarding their net-zero targets.

“There is a clear discontinuity, a large gap, between what companies say they will do and what they will actually be doing,” is the frank view from Dr. Luca Taschini, associate professorial research fellow at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.

Figure 7: The complex world of sustainability reporting

TCFD

The Task Force on Climate-related Financial Disclosures was set up by the G20’s Financial Stability Board (FSB) to develop guidelines for companies, banks and investors to encourage disclosure of information on climate-related risks and opportunities for stakeholders.

EU Guidelines

EU Guidelines on reporting climate-related information for listed companies required to make disclosures under the Non-Financial Reporting Directive (NFRD). They incorporate TCFD recommendations and the EU taxonomy, a classification system designed to identify organisations having positive climate impacts.

SASB

The Sustainability Accounting Standards Board has published industry-oriented sustainability considerations and metrics, to identify issues likely to affect financial performance.

GRI

The Global Reporting Initiative is an international independent standard-setting organisation claiming to provide the most common framework for sustainability reporting.

CDP

Is a non-profit organisation running a global disclosure system for investors, companies, cities, states and regions to manage environmental impacts.

CDSB

The Climate Disclosure Standards Board has an established framework for companies to report environmental and climate change-related information in corporate financial reporting.  

Source: Aviva Investors, September 2021

“There is an urgent need to verify corporate claims regarding the net-zero targets they are pursuing and assess the appropriateness and feasibility of these claims. This is the analysis we need; it reaches beyond conventional ESG analysis. It is not just about carbon pricing; it's about technology and practical solutions. Moving forward, the question is: How will you reduce emissions? What are you going to do to adapt your business to a low-carbon economy?”

One approach being discussed that could help achieve that is sustainable cost accounting. Devised by Murphy as part of an academic challenge to bring climate directly into financial reporting, it suggests bringing decisions around carbon management onto the balance sheet of larger listed companies as part of TCFD guidelines. (More on Murphy’s views, here.)25

In countries like the UK, where achieving net zero is established in law, Murphy argues a crystalising event has taken place, which should force companies to set out exactly how they intend to achieve the goal using proven technologies and provision to cover the cost of achieving it.

“It would include the requirement to make a true and fair disclosure to say: ‘This is the cost of the decision we have made to become sustainable,” Murphy says. But achieving the target might mean changing the metric being monitored from carbon emissions (where the cost of carbon is outside the company’s control) to the cost of carbon abatement within the company’s own systems (where the company has greater influence).

Murphy suggests this is not radical in terms of accounting treatment – it uses well-established principles around provision-making – but could have radical implications for investors, savers and pension holders (see Figure 8). Firstly, corporate decision makers would be forced to cost the options to transition to a zero-carbon world; decisions could not be kicked down the road. Secondly, climate provisioning could constrain a company’s ability to pay dividends, which would also impact its attractiveness from a long-term investment perspective. And there could be implications for governments too if long-term savings expectations were to disappoint.

Figure 8: Impacts of sustainable cost accounting
Impacts of sustainable cost accounting
Source: The Corporate Accountability Network, 2019

“Can companies afford to pay dividends unless they can demonstrate how they can also address climate change?” Murphy asks. “This is a going-concern issue. If they can put forward plausible plans to raise capital to fund the transition, then they can carry on paying dividends. If not, they will have to constrain distributions.”

Out of this comes Murphy’s idea of carbon insolvency. Exactly which businesses will fail to transition to a zero-carbon world is the question gripping investors everywhere; it features in regulatory risk conversations and discussions on how failing organisations might be handled via a climate ‘bad bank’.[vi] But current financial disclosures do not currently allow stakeholders to assess the situation with any precision.

Assessing value chain emissions under current TCFD guidelines

Take the way in which companies are revealing scope 3 emissions from across their value chains (as distinct from operational emissions). This is a “messy” area, according to Steve Waygood, chief responsible investment officer at Aviva Investors, one many organisations have not yet addressed, from the airport operators that enable planes down runways to financial services companies funding carbon-heavy activities. The issues are increasingly apparent to organisations seeking to promote climate transparency, like CDP.

“We began asking financial institutions to look through their operational activities to their business activities in 2020,” Kreps, told AIQ in a recent interview. “We asked what types of companies and issuers are being financed, what the nature of lending is, what credit facilities are being put in place and so on. That’s a level of analysis some institutions have not got to yet. We found the emissions from those business activities were 700 times greater than operational emissions from organisations making financial decisions.

Financial institutions are high emitters. They hold the purse strings and have the power

“From that perspective, financial institutions are high emitters, because they are providing capital to the real economy and that will determine the transition or the lack of it. As players in the capital markets, they hold the purse strings and have the power. This is where I see a really significant opportunity for change.”

Not all institutions allocating capital have a clear look-through to their investments, and the bodies in which they invest may also be grappling with their own operational minutiae. “There's an enormous amount of data,” says Waygood. “But there is more data than there is understanding, and more initiatives than people really know what to do with. It's almost like the ‘how do you measure alpha?’ conversations that took place years ago, when people were talking about the efficient markets hypothesis and capital asset pricing model.”

Sustainability professionals acknowledge the need to raise the bar. “We need to move from a discussion of ESG, that without anything further is just looking at all the relevant information, to putting the financial system onto a footing of sustainability. We need to reward those issuers with truly sustainable business models that do not result in the destruction of more natural or social capital than is generated or naturally replenished. Conversely, we must address the withdrawal of capital or underwriting from those who do not,” says Tom Tayler, senior manager in Aviva Investors’ Sustainable Finance Centre for Excellence.

In many cases, the information that could inform that action is incomplete, may involve large margins of error, and is not being translated into public accounts in an accessible way.

“Corporate GHG accounting practices as they now stand do not tell you that much about climate risk or the impact of investment decisions,” warns Dr. Matthew Brander, lecturer in carbon accounting at the University of Edinburgh. He suggests non-professionals are likely to be hard pushed to understand carbon management strategies from public information. (More from Brander, here.)27

In the quest for greater disclosure, it is possible that polluting or climate-sensitive activities are simply forced off balance sheet and into the hands of private actors, enabled by financiers contemplating high hurdle rates and rapid paybacks.

Surveying and course correcting simultaneously

These questions on the values reflected in data gathering, about how and what to measure and the value of metrics on the balance sheet are going to be critical in addressing the climate emergency. They will ultimately determine investment flows, who survives and who fails. But agreeing on what happens next is not straightforward.

We are trying to course correct the global economy

“We are trying to course correct the global economy – by surveying the terrain, drawing the map and re-planning the route, all at the same time,” says Waygood, who has been campaigning for greater transparency on climate exposures for years. He describes the changes being discussed as both too slow for what is needed, but also far too fast for many who find themselves without the expertise they need to navigate.

For Pitt-Watson, it is a question of survival. “No companies are going concerns if our planet is not a going concern, and it is crazy to be drawing up accounts as if there was no issue about whether our planet is a going concern,” he says.

But carbon accounting is young and not all participants appreciate the urgency. “GHG accounting practice has a lot of maturing to do,” as Brander points out. “We are still at a point where the users of GHG information do not see it as material. If they did, they would be shouting about misleading information. As climate change risk ramps up, certain practices that do not give meaningful representations of the carbon intensity of a company or its exposure to climate-related risk will be scrutinised much more carefully.”

Let the scrutiny begin.

Methane: Social and environmental impacts

“The air quality community has not talked about methane enough and the climate change community has not talked about the air quality issues of methane enough,” says Nino Künzli, one of the Climate and Clean Air Coalition’s Scientific Advisory Panel at the Swiss Tropical and Public Health Institute.28

The main public health concerns include the way in which methane contributes to the formation of ground-level ozone, visible as smog. Smog can trigger respiratory problems, increasing asthma-related hospital visits and even deaths in worst-case scenarios.29

Extreme heat, which methane contributes to, is also problematic. Hours of lost labour are one consideration, while heat-related deaths are also rising. A recent study using data from 43 countries showed heat-related mortality increasing on every continent between 1991 and 2018.

“Across all study countries, we find that 37 per cent (range 20.5–76.3 per cent) of warm-season heat-related deaths can be attributed to anthropogenic climate change,” concluded Nature Climate Change.30

Ozone also affects plants, entering the stomata of leaves and damaging plant tissue during respiration. This has the effect of reducing yields; studies in various parts of the world flag negative impacts on the harvests of soybeans (-12 per cent), wheat (-15 per cent)31 and grapes (-22 per cent).32

References

  1. Faith E. Pinho, ‘Palm Springs matches all-time high temperature of 123 degrees’, LA Times, June 18, 2021
  2. ‘It’s time for chartered accountants to save the world’, ICAEW, April 30, 2021
  3. Jeff Masters and Bob Henson, ‘June 2021: Earth’s fifth-warmest June on record, warmest over land areas’, Yale Climate Connections, July 13, 2021
  4. ‘Carbon cycle: pools, fluxes and a word about units’, University of New Hampshire, 2008
  5. ‘How carbon affects nearly everything on earth – including our future’, Smithsonian’s National Museum of Natural History, May 30, 2019
  6. Jane Burgermeister, ‘Missing carbon mystery: Case solved?’, Nature Climate Change, August 2007
  7. Carol Rasmussen, ‘NASA finds good news on forests and carbon dioxide’, NASA, December 29, 2014
  8. Todd S. Rosenstock and Andreas Wilkes, ‘Reorienting emissions research to catalyse African agricultural development’, Nature Climate Change, May 17, 2021
  9. Todd S. Rosenstock, et al., ‘Scaling point and plot measurements of greenhouse gas fluxes, balances, and intensities to whole farms and landscapes’, Methods for Measuring Greenhouse Gas Balances and Evaluating Mitigation Options in Smallholder Agriculture, August 2016
  10. ‘Greenhouse gas protocol’, World Resources Institute
  11. ‘Confronting climate change: Methane emissions and the environment’, Council on Foreign Relations, October 2, 2020
  12. Michelle Cain and Stéphane Bauguitte, ‘Podcast: Measuring methane above the arctic’, Natural Environment Research Council, April 1, 2014
  13. ‘Despite pandemic shutdowns, carbon dioxide and methane surged in 2020’, NOAA Research News, April 7, 2021
  14. Christophe McGlade, K.C. Michaels, and Tim Gould, ‘Global methane emissions from oil and gas’, IEA, March 31, 2020
  15. ‘Confronting climate change: Methane emissions and the environment’, Council on Foreign Relations, October 2, 2020
  16. ‘Synopsis: Reducing methane emissions: Best practice guide: Pneumatic devices’, Methane Guiding Principles partnership, November 2019
  17. ‘Featuring Fred Krupps: Confronting climate change: Methane emissions and the environment’, Council on Foreign Relations, October 2, 2020
  18. Mat Hope, ‘Explained: Fugitive methane emissions from natural gas production’, CarbonBrief, July 3, 2014
  19. Kate Abnett and Shadia Nasralla, ‘Gas infrastructure across Europe leaking planet-warming methane’, Reuters, June 24, 2021
  20. Susan Dio, ‘BP America chief: It's essential that the EPA regulate methane emissions [Opinion]’, Houston Chronicle, March 28, 2019
  21. Jonathan Ford, ‘Accounting has become the opposite of useful for users’, Financial Times, March 10, 2019
  22. Jonathan Ford, ‘Accounting has become the opposite of useful for users’, Financial Times, March 10, 2019
  23. ‘Accounting for climate’, IASB panel event, November 5, 2020
  24. Richard Murphy, ‘Accounting is the new frontline when it comes to the environment – and we need to take action on it by 31 December’, Tax Research UK, December 8, 2020
  25. ‘Will accountants save the world? An interview with Richard Murphy’, Aviva Investors, August 6, 2021
  26. ‘Climate “bad banks”: the key to sustainable energy transformation?’, Oxford Business Group, July 22, 2021
  27. ‘Carbon accounting: Measuring what matters’, Aviva Investors, June 11, 2021
  28. ‘Methane’s links to respiratory diseases strengthens the case for its rapid reduction’, Climate & Clean Air Coalition, March 22, 2021
  29. ‘New report: Cutting methane emissions now will yield major climate, health and economic benefits’, Duke University - Nicholas School of the Environment, May 7, 2021
  30. A.M Vicedo-Cabrera, et al., ‘The burden of heat-related mortality attributable to recent human-induced climate change’, Nature Climate Change, May 31, 2021
  31. Will Date, ‘Ozone pollution harming crop yields, global study suggests’, AirQualityNews.com, August 8, 2018
  32. Chaopeng Hong, et al., ‘Impacts of ozone and climate change on yields of perennial crops in California’, Nature Food, March 16, 2020

View Cleaning Up Capitalism edition online

To tackle the climate crisis, economies and markets need a systems reboot. In AIQ: Cleaning Up Capitalism, we examine what it will take to get us back on track to achieve net zero; from transforming the financial system and accounting, to decarbonising heavy industries and ensuring polluters pay.

Find out more

Want more content like this?

Sign up to receive our AIQ thought leadership content.

Please enable javascript in your browser in order to see this content.

I acknowledge that I qualify as a professional client or institutional/qualified investor. By submitting these details, I confirm that I would like to receive thought leadership email updates from Aviva Investors, in addition to any other email subscription I may have with Aviva Investors. You can unsubscribe or tailor your email preferences at any time.

For more information, please visit our privacy notice.

Related views

Important information

THIS IS A MARKETING COMMUNICATION

Except where stated as otherwise, the source of all information is Aviva Investors Global Services Limited (AIGSL). Unless stated otherwise any views and opinions are those of Aviva Investors. They should not be viewed as indicating any guarantee of return from an investment managed by Aviva Investors nor as advice of any nature. Information contained herein has been obtained from sources believed to be reliable, but has not been independently verified by Aviva Investors and is not guaranteed to be accurate. Past performance is not a guide to the future. The value of an investment and any income from it may go down as well as up and the investor may not get back the original amount invested. Nothing in this material, including any references to specific securities, assets classes and financial markets is intended to or should be construed as advice or recommendations of any nature. Some data shown are hypothetical or projected and may not come to pass as stated due to changes in market conditions and are not guarantees of future outcomes. This material is not a recommendation to sell or purchase any investment.

The information contained herein is for general guidance only. It is the responsibility of any person or persons in possession of this information to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. The information contained herein does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it would be unlawful to make such offer or solicitation.

In Europe, this document is issued by Aviva Investors Luxembourg S.A. Registered Office: 2 rue du Fort Bourbon, 1st Floor, 1249 Luxembourg. Supervised by Commission de Surveillance du Secteur Financier. An Aviva company. In the UK, this document is by Aviva Investors Global Services Limited. Registered in England No. 1151805. Registered Office: St Helens, 1 Undershaft, London EC3P 3DQ. Authorised and regulated by the Financial Conduct Authority. Firm Reference No. 119178. In Switzerland, this document is issued by Aviva Investors Schweiz GmbH.

In Singapore, this material is being circulated by way of an arrangement with Aviva Investors Asia Pte. Limited (AIAPL) for distribution to institutional investors only. Please note that AIAPL does not provide any independent research or analysis in the substance or preparation of this material. Recipients of this material are to contact AIAPL in respect of any matters arising from, or in connection with, this material. AIAPL, a company incorporated under the laws of Singapore with registration number 200813519W, holds a valid Capital Markets Services Licence to carry out fund management activities issued under the Securities and Futures Act (Singapore Statute Cap. 289) and Asian Exempt Financial Adviser for the purposes of the Financial Advisers Act (Singapore Statute Cap.110). Registered Office: 1 Raffles Quay, #27-13 South Tower, Singapore 048583.

In Australia, this material is being circulated by way of an arrangement with Aviva Investors Pacific Pty Ltd (AIPPL) for distribution to wholesale investors only. Please note that AIPPL does not provide any independent research or analysis in the substance or preparation of this material. Recipients of this material are to contact AIPPL in respect of any matters arising from, or in connection with, this material. AIPPL, a company incorporated under the laws of Australia with Australian Business No. 87 153 200 278 and Australian Company No. 153 200 278, holds an Australian Financial Services License (AFSL 411458) issued by the Australian Securities and Investments Commission. Business address: Level 27, 101 Collins Street, Melbourne, VIC 3000, Australia.

The name “Aviva Investors” as used in this material refers to the global organization of affiliated asset management businesses operating under the Aviva Investors name. Each Aviva investors’ affiliate is a subsidiary of Aviva plc, a publicly- traded multi-national financial services company headquartered in the United Kingdom.

Aviva Investors Canada, Inc. (“AIC”) is located in Toronto and is based within the North American region of the global organization of affiliated asset management businesses operating under the Aviva Investors name. AIC is registered with the Ontario Securities Commission as a commodity trading manager, exempt market dealer, portfolio manager and investment fund manager. AIC is also registered as an exempt market dealer and portfolio manager in each province of Canada and may also be registered as an investment fund manager in certain other applicable provinces.

Aviva Investors Americas LLC is a federally registered investment advisor with the U.S. Securities and Exchange Commission. Aviva Investors Americas is also a commodity trading advisor (“CTA”) registered with the Commodity Futures Trading Commission (“CFTC”) and is a member of the National Futures Association (“NFA”). AIA’s Form ADV Part 2A, which provides background information about the firm and its business practices, is available upon written request to: Compliance Department, 225 West Wacker Drive, Suite 2250, Chicago, IL 60606.