Featuring Sarasin & Partners, Miller/Howard, Carbon Tracker, & I4PC, February 25, 2026
To watch the webinar recording, see below
More than 100 investors, regulators, academics, and market participants signed up for a virtual discussion on a critical, and often overlooked, financial risk:
Are Canadian oil & gas companies properly accounting for decommissioning liabilities in a world undergoing an energy transition?
The conversation with an all-star panel of international experts was technical at times, but the implications were not. This is about shareholder value.
Accounting assumptions can move billions
Jessica Carradine of Investors for Paris Compliance shared findings from I4PC’s assessment of Canada’s largest upstream oil & gas companies.
Her message was clear: assumptions matter.
“Through long asset lives and high discount rates, one company’s decommissioning liability can be reported anywhere from $85 million to $4.4 billion. […] Sensitivity analysis gives investors insight into how small changes in assumptions can have large impacts on financials.”
The difference between $85 million and $4.4 billion is not a rounding error. It’s the power of assumptions — asset lifespans, discount rates, and timing — embedded in financial statements.
This isn’t optional
Barbara Davidson of Carbon Tracker, a key architect behind the Climate Action 100+ accounting and auditing assessment (now integrated into Climate Engagement Canada), addressed a common misconception: these expectations are not new. They are not activist demands. They are grounded in existing accounting standards.
“This isn’t a new or voluntary expectation. Existing accounting standards already require companies to disclose material uncertainties, including the timing and costs of decommissioning obligations that could be impacted by the energy transition.”
Financial statements are forward-looking documents. They embed forecasts about prices, demand, useful lives, and costs. If transition risk affects those forecasts, it affects the balance sheet.
From accounting issue to governance issue
Nicole Lee of Miller/Howard described how reviewing Carbon Tracker’s work prompted her team to take a closer look at portfolio companies.
“You have to know it’s comprehensive and accurate accounting so you can make prudent investment decisions.”
And quickly, the discussion moved beyond technical accounting to “who is overseeing the story the financials are telling us?”
That question lands squarely at the board level.
Engagement works, but it takes tenacity
Natasha Landell-Mills of Sarasin & Partners has been engaging oil & gas majors on this issue since 2017. Her message to investors:
“Engagement does pay off. You need to be tenacious.”
Her experience engaging in sustained dialogue led to improved disclosure of long-term price assumptions and more explicit integration of climate-aligned inputs at major European companies.
Progress didn’t happen overnight. But it did happen.
Why this matters now
Small adjustments in discount rates or asset lives can shift reported liabilities by billions. When liabilities are understated, shareholder value is at risk. This is not just a climate issue. It’s a financial reporting issue. A governance issue. And ultimately, a fiduciary issue.
This is why, in January 2026, I4PC sent open letters to the Chair of the Audit Committee (cc’ing their auditors) at Canada’s largest 14 upstream oil and gas companies. These letters put them on notice that we will be assessing their 2025 financials for improved decommissioning liability reporting, failing which, we will be withholding votes for the re-election of the Chair of the Audit Committee and for the reappointment of the auditor. Stay tuned (follow us on LinkedIn) as we expect to release investors briefs in a few weeks.
If you’re an investor engaging Canadian oil & gas companies this proxy season:
- Ask about asset life timelines
- Ask for quantitative sensitivity analysis
- Ask how auditors assessed transition risk
You don’t need to be an accountant. You just need to ask the questions.
Let’s keep the conversation going.
If you missed the webinar, you can find all the relevant material below:
- Jessica’s slides about the Canadian O&G liability gap
- I4PC’s recent assessment of upstream oil and gas liability reporting
- Carbon Tracker’s latest report on Asset Retirement Obligations (AROs)
- Miller/Howard’s exempt solicitation filed at EOG Resources.
- Sarasin & Partners 2020 open letter to the Chair of the audit committee at 10 European energy companies
- Webinar recording:
