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Press release
Bonn, 28 June 2008: A new expert legal study published by Germanwatch analyses the obligations of automobile companies in Germany, France and Italy in regard to the EC and domestic law for reporting of climate change and oil price risks. Reporting of those risks is of special interest for shareholders and investors alike. The most recent events on Wall Street confirm the anxiety of investors in this regard. US automobile stocks are currently in freefall, because they underestimated and neglected to act upon the risks of soaring oil prices. German automobile companies seem to be following the same downward trend.
The legal study explicitly shows the need of car companies to report on "principal risks and uncertainties" like oil price rises and potential climate regulation, which they may face in the future. The Society of Investment Professionals in Germany (DVFA) has recently published a landmark study, pointing out that for automobile companies the "sales-weighted average fleet consumption" is a key performance indicator. Other recent studies from Deloitte and Standard & Poor's confirm this point. Roda Verheyen, author of the Germanwatch study, stresses: "Companies are obliged to disclose minimum requirements in their annual reports. In this respect, annual reports must also include information related to environmental matters, to the extent necessary for an understanding of the company's development, performance or position". Car companies that do not report or adequately manage risks likewise place their investors at a risk. Kristin Gerber, finance expert of Germanwatch, warns: "The actual development, however, shows that quite a number of car and aviation companies do not report adequately on risks related to climate change and oil prices."
Yet, the question is: Who can enforce the implementation of these reporting obligations under French, German and Italian law. Can lawsuits be an appropriate mechanism for investors to complain about inadequate risk transparency?
German, French and Italian lawyers
discuss in this expert study possible legal consequences of the failure
to declare risks, including penal sanctions and other legal measures. Investors
could make use of them in the near future, if the reporting standards of
automobile companies do not adjust to the new climate policy and associated
business risks.
Contact:
Further information: