Carbon Tracker finds oil and gas decommissioning disclosures largely opaque

Carbon Tracker's December 17, 2025 report assessed 38 oil and gas firms in Australia, Canada and the UK, finding most fail to disclose Asset Retirement Obligation costs and schedules. The transparency gaps signal stranded-asset and climate-risk pricing challenges relevant to Indian financial institutions and investors.

The Carbon Tracker Initiative released "Asset Retirement Obligations: What Lies Beneath?" on December 17, 2025, examining how 38 major oil and gas companies headquartered in Australia, Canada and the United Kingdom disclose decommissioning liabilities under International Financial Reporting Standards. UK companies disclosed only 45% of sought information on average, Canadian firms 42%, and Australian firms just 19%. Even top performer bp disclosed only 73% of expected data points, revealing widespread failure to convey financial exposure hidden within these environmental commitments.

The findings affect financial institutions, institutional investors and market analysts pricing climate risk in carbon-intensive infrastructure. Approximately 71% of assessed companies failed to disclose meaningful estimated settlement costs, and three-quarters provided no payment schedule, obscuring when major cash outflows will occur. Only 14% disaggregated obligations by business segments such as upstream or midstream, hampering risk assessment across the value chain. The report links higher transparency to active regulatory surveillance in the UK and Canada versus Australia's lack of thematic reviews.

Financial institutions should treat these disclosure gaps as material when pricing climate risk and evaluating long-term creditworthiness, since opacity complicates assessing liquidity and solvency. The report urges regulators to prioritise Asset Retirement Obligations in upcoming supervisory agendas to protect market integrity. Investors should demand granular, segment-level liability data and payment schedules, and watch for sudden capital losses and stranded-asset risks as the energy transition forces earlier-than-anticipated retirements. Companies mastering these disclosures will likely gain greater investor trust and more stable capital access.

Key figure — Transparency scores: UK 45%, Canada 42%, Australia 19% (38 companies assessed)