KPMG slapped with $6.2m fine over oil company audit errors
KPMG has been slapped with a fine of more than $6.2m by the US Securities and Exchanges Commission (SEC) after it signed off the audit of Miller Energy Resources, a Tennessee-based oil and gas company, that had “grossly overstated” certain assets by more than 100 times. According to the SEC, KPMG did not fully assess the risks of taking on Miller Energy as a client and did not adequately staff the audit, which failed to detect the overvaluation of the Alaskan wells and the duplication of certain fixed assets in the company’s valuation. KPMG was hired as an external auditor in 2011 and gave a positive “unqualified” report. The announcement follows an SEC investigation that found that Miller Energy had valued its Alaskan oil wells at $480m – though purchased for less than $5m – which helped transform a penny stock into a company listed on the New York Stock Exchange. The KPMG case is part of an international push to improve the quality of external audits. John Riordan, the KPMG partner who was in charge of auditing Miller Energy, agreed to settle charges against him, the SEC said. (Financial Times)*
Energy
Clean energy stocks outpacing fossil fuel investments in Trump era, report finds
Global clean energy stocks have surged past investments in fossil fuels in the past year despite the political shockwaves caused by Trump’s US presidency, new research has found. An update to the Carbon Clean200, which ranks companies based on their revenues from clean energy, shows that stocks in clean energy in fact surpassed their fossil fuel benchmark on Trump’s inauguration day. Green media research firm and co-author of the report Corporate Knights said that the market forces driving investments in clean energy are displaying strong resilience to a climate-sceptic US administration. Companies which contributed the most to the Clean200’s first year performance include Siemens,Toyota,Schneider Electric, ABB Group and Panasonic, which are all involved in the provision of products, materials and services related to energy efficiency. (edie)
Policy
Modern slavery crackdown will force large Australian companies to examine supply chains
The Australian Federal Government has moved to crack down on modern slavery by forcing large businesses to lay out the steps they are taking to eradicate it. The Coalition plans to introduce legislation that would force companies with annual revenue of over $100 million to ensure their supply chains are not complicit in forced labour or human trafficking and to publish their statements on slavery every year on a public database and on the company websites. Justice Minister Michael Keenan said the Government would talk to businesses to make sure its final legislation was “as simple, sensible and effective as possible” and to help them “respond more effectively to modern slavery” and “create a level playing field to share information” about their efforts. Advocacy groups say there are more than 4,000 victims of modern slavery in Australia. (ABC News)
Trump orders US infrastructure projects to ignore Obama-era climate risk rules
U.S. President Trump has unveiled an executive order to minimise the extent to which infrastructure projects have to consider climate-related risks. The order revokes an Obama-era rule that aimed to reduce exposure to increases in sea level, droughts and floods and was widely praised by green groups and many infrastructure experts. Trump argued it would help streamline permitting processes in support of his plans for a $1tr infrastructure drive. The new order will set a two-year deadline for completing permits, and introduce a ‘one Federal decision’ protocol to ensure one agency leads the permitting process, even if other agencies are required for environmental reviews. Rafael Lemaitre, former Director of Public affairs at the Federal Emergency Management Agency, said that the decision was undoing “the most significant action taken in a generation” to safeguard US infrastructure. (Business Green)
Responsible Investment
Trucost launches new corporate carbon pricing tool
Trucost, part of S&P Dow Jones Indices, has launched the Corporate Carbon Pricing Tool for companies, to help them to assess exposure to evolving regional carbon pricing mechanisms. The tool’s insights are designed to help companies better understand the business case for more sustainable products and business models, such as prioritizing regional investment in ‘green’ technology, resource efficiency or different product strategies. Adopting internal carbon prices enables companies to get ahead of intensifying carbon regulations but identifying a credible set of prices can be challenging. The Tool simplifies the process by combining a company’s greenhouse gas emissions and financial performance data with Trucost’s regional carbon-pricing information to provide insights on carbon-pricing risks out to 2030. (Sustainable Brands)
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