United Nations climate envoy Mark Carney on Thursday threw his weight behind a growing push by investors for companies to more accurately reflect climate-related risks in their financial accounts.Such risks can range from physical dangers such as water levels rising and destroying factories, to new regulations putting a higher price on carbon emissions, for example, which could render products and services redundant or in need of new pricing, impacting profits and contingent liabilities.

Already this year, leading oil majors including BP and Shell have written down the value of their assets after revising long-term oil price assumptions, which underpin decisions such as capital expenditure and impairments, and investors are now calling on the process to be expanded to all companies.

Last week, investor groups representing more than $103 trillion in assets wrote an open letter calling on companies and auditors to follow guidance from the International Accounting Standards Board (IASB) released last year.

That statement, in the form of an IASB ‘opinion’, made clear that factoring climate risks into company accounts is already required within the existing rules, if relevant and material, even though most companies have yet to do so.

Specifically, the investor groups, which include the United Nations-backed Principles for Responsible Investment, said companies needed to explain the key assumptions made with regard to climate risk and make sure they are compatible with the goals of the Paris climate agreement.

Auditors, meanwhile, needed to only sign off accounts that were consistent with the IASB opinion in “letter and spirit”. Regulators and civil society then needed to support the implementation of the opinion.

Speaking at a UN PRI webinar on Thursday, Carney, who has long championed the Taskforce on Climate-Related Financial Disclosures – a framework to help companies assess and manage the risks of climate change – said the conclusions also needed to be reflected in company profit and loss statements.

“It’s recognising that when climate change risks are considered material that, just as any other financial risk, there should be disclosures included.”

“If they (company boards) don’t think Paris-compliant assumptions are relevant for the valuing of assets, then it’s important that that is known.”