Carnarvon Petroleum – climate change not a financial risk

9 November 2018

Western Australia-based oil and gas exploration company Carnarvon Petroleum made clear at its annual general meeting today that it does not consider climate change as a material financial risk.

Chairman P. J. Leonhardt explained he had missed a page of his opening address when asked by a shareholder if climate change is considered a material financial risk to the company. He said Carnarvon was aware of climate change and that they had paid a carbon offset company to plant a sufficient number of trees.

However, when pushed to explain why climate change is not considered a material financial risk to the business, Mr. Leonhardt replied:

“At this stage we don’t see any immediate risks to shareholders. As the situation changes and we evolve from a exploration company to a production company, the company will take those things into account going forward.”

Carnarvon Petroleum’s Quarterly Report for 30 June 2018 states that the effects of weather and climate change could cause the company’s financial performance to differ materially. Despite this, it still fails to include climate risk as a financial risk in its mainstream reporting.

“We don’t have any operations which are subject to climate change,” Mr Leonhardt added.“I think the statements we have made are absolutely correct and we don’t see any implications to shareholders at this stage.” 

Research from Oil Change international shows that “emissions from existing gas fields, alongside existing oil and coal development, already exceed carbon budgets aligned with the Paris climate accord.” Oil and gas assets could become stranded.

Companies with trillions of dollars worth of assets globally have already started to disclose the financial implications and risks that climate change poses to their business.

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