TRSM Research Seminar by Dr. Thomas Schneider

Title: Fossil fuel reserves and resources reporting and unburnable carbon: Investigating conflicting accounts

This paper is published in Critical Perspective on Accounting (January 2020). It is open access, available at Science Direct (external link) .

Description: This paper investigates fossil fuel reserves and resources disclosures and how they might change in response to global climate change agreements that seek to limit greenhouse gas emissions. On the one hand, it might be expected that fossil fuel firms will be less valuable if their reserves become ‘unburnable’. On the other hand, capital markets currently assign a positive value to fossil fuel reserves and resources. A conundrum, therefore, exists. Given that accounting disclosure rules underpin capital market valuation processes, this setting provides an opportunity to interrogate the functionality of accounting during a time of change. To achieve this goal, a multi-methods investigation has been undertaken; combining a survey of accounting disclosure rules for reserves, identification of accounting disclosures made by fossil fuel firms in several countrys' stock markets, and stock market participants’ views on the extent to which unburnable carbon exists. Using Miller and Power (2013) we identify when and how unburnable carbon could be recognized in corporate reporting.

Presenter: Thomas is an Associate Professor of Accounting at the Ted Rogers School of Management, Ryerson University, Toronto, Canada. He is also a Chartered Professional Accountant (Canada) with extensive experience in management and consulting prior to entering into an academic career. Since entering academia, his research and teaching have focused on environmental accounting, particularly in the natural resource sector. It ranges from exploring the capital market effects of environmental related accounting rules and securities regulations, to policy-based work in the energy sector (fossil fuels, hydro-power, energy efficiency, etc.). He has published his research in such leading journals as Contemporary Accounting Research, Accounting Auditing and Accountability Journal, Critical Perspectives on Accounting and Sustainability Accounting Management and Policy Journal; and he is on the editorial boards of Accounting Forum, Sustainability Accounting, Management and Policy Journal, Social and Environmental Accounting Journal, Journal of Public Budgeting Accounting and Financial Management, and Contemporary Accounting Research. Thomas is a member of the United Nations Expert Group on Resource Management and has worked to develop the guidelines on social and environmental considerations for the United Nations Framework Classification (UNFC) for resources. The UNFC is currently being further developed and adopted worldwide to aid in the classification and management of resources in the context of the Sustainable Development Goals.