Investors press for disclosure of tar sands’ climate risk

F&C Management, the UK's oldest investment trust, has teamed up with a group of US and Canadian fund managers to halt Wall Street financial regulators softening the rules on tar sands, arguing that new rules should take account of the carbon impact of reserves disclosed by oil and gas companies.

The move reflects changing attitudes among mainstream investors to the impact of commercial activities that could worsen global warming and is aimed at discouraging the US securities; exchange commission (SEC) from allowing energy firms to include carbon-heavy tar sands in their reserves submissions to the regulator.

Elizabeth McGeveran, senior vice-president in F&C's governance and sustainable investment team, said it was important for investors to be able to assess accurately the risk profile of reported reserves at a time when governments around the world were taking an increasingly hard line on carbon pollution.

"The energy consumption required to extract a barrel from Canadian tar sands is very different to a barrel of crude from the Gulf of Mexico. Understanding climate risk will assist investors in understanding and evaluating reserves," she said.

"SEC regulations already require the disclosure of known trends that companies can reasonably expect will have a material impact on net sales, revenues or income from continuing operations and we believe that the disclosure of any estimated additional risks posed by the extraction and development of additional reserves will be important," added McGeveran.