5 Slide 6: Fossil Fuel Reserves Held by Listed Companies Carbon Tracker’s report ‘Unburnable Carbon, are the financial markets carrying a carbon bubble?’ in 2011 looked at 200 fossil fuel companies listed on different stock exchanges around the world. The diagram set out in this slide illustrates the location of these stock exchanges, of which in 2011, the most significant were London, New York and Moscow. The bubbles represent the relative size of the CO2 for coal, oil and gas, stock exchange by stock exchange. The methodology employed then, which is still relevant in 2018, is: 1. Company-level: Reserves x carbon factor = carbon dioxide potential. 2. Exchange-level: Sum of company carbon dioxide potentials = Exchange total. 3. Global-level: Sum of exchange totals > Global carbon budget. Even after 7 years from the first report in 2011, these numbers in 2018 continue to not add up. In 2011, Carbon Tracker recommended that financial regulators should: 1. Require reporting of fossil fuel reserves and potential CO2 emissions by listed companies and those applying for listing. 2. Aggregate and publish the levels of reserves and emissions using appropriate accounting guidelines. 3. Assess the systemic risks posed to capital markets and wider economic prosperity through the overhang of unburnable carbon 4. Ensure financial stability measures are in place to prevent a carbon bubble bursting. As of 2018, following the creation of the Taskforce for Climate Related Financial Disclosures, set up by Governor Mark Carney and Mayor Bloomberg at the request of the Financial Stability Board, points 3 and 4 are being addressed. See https://www.fsb-tcfd.org/ Points (1) and (2) remain unaddressed. In 2013, Carbon Tracker wrote to the Financial Accounting Standards Board (FASB) see https://www.carbontracker.org/reports/carbon-trackers-letter-to-financialaccounting-standards-board-fasb-april-2013/ In this document, we did not request FASB to pass judgment on the future viability of fossil fuel reserves, but rather, we urged them to recognize the need for disclosure sufficient to permit investors to make this determination for themselves. Carbon Tracker’s analysis addresses how the requested disclosure: • improves the usefulness of financial reporting by providing relevant and faithfully represented financial information;