Finance professionals working in the oil and gas industry have likely been accounting for carbon in some form for many years; and, over the past several years, there have been accelerated efforts to track and lower emissions.
Accountants are in a good position to provide insightful assessments that inform decision-making and help build organizational resilience in the face of potential risks and opportunities posed by climate change.
At the 2023 AICPA® & CIMA® Oil & Gas Conference in November, you will learn initiatives and policy approaches to be aware of as you account for carbon and help your clients or organizations become more resilient in a rapidly evolving landscape.
Carbon pricing and emissions trading
As a finance professional working in the oil and gas industry, you will need to incorporate the cost of carbon emissions into financial statements and strategize to reduce them.
Your clients or organizations may even decide to adopt internal carbon pricing as a tool for risk management and strategic decision-making. By putting a price on carbon internally, companies can assess the potential costs and risks associated with carbon-intensive projects and prioritize low-carbon investments.
Sustainability reporting and disclosures
Since the Task Force on Climate-related Financial Disclosures (TCFD) released their recommendations in 2017, an increasing number of organizations have adopted sustainability reporting to enhance transparency for investors, stakeholders, and regulators on their environmental impact and efforts to reduce the devastation from natural disasters.
The Security and Exchange Commission and other governmental bodies have created guidelines for reporting on sustainability initiatives, and investors and consumers are ready for companies to disclose their greenhouse gas emissions, emission reduction targets, and other sustainability-related metrics.
Now is the time to begin collecting and disclosing sustainability metrics to increase transparency and get a head start on the transition toward a more sustainably minded world. Investors are increasingly looking into the environmental, social, and governance (ESG) performance of organizations, so companies may need to understand and communicate those metrics to attract investors.
Carbon offsetting and carbon capture projects
Carbon offsetting is a way for organizations to compensate for their emissions by investing in carbon reduction programs, such as reforestation and renewable energy.
Carbon capture involves capturing CO2 emissions, transporting them and permanently storing them deep underground.
Oil and gas companies may explore carbon offsetting strategies or invest in carbon capture and storage (CCS) projects to compensate for their emissions. As a finance professional, your skills are essential in evaluating the financial viability and impact of these initiatives.
Transition to renewable energy and net zero targets
Initiatives such as emissions trading and carbon capture can help mitigate damaging effects of climate change, including the frequency and severity of storms, but organizations should also be thinking about how they can reach net-zero targets and invest in renewable energy sources.
The accounting profession must adapt to assess the financial viability of renewable projects and track progress toward net-zero goals.
Hear from leaders, network with fellow experts and discover more about accounting for carbon at the AICPA & CIMA Oil & Gas Conference, Nov. 8–10, in Las Vegas and live online.
Looking for more resources? Watch the Foundational Carbon Accounting webcast or read the Environmental issues brief: Accounting for carbon.