Pension fund urges more climate risk disclosure
WASHINGTON (Reuters) - Calpers, the biggest U.S. pension fund, said on Wednesday it could not assess companies thoroughly unless they detail potential exposure to climate change-related risks and benefits.
The California Public Employees' Retirement System (Calpers) said it was not enough that some companies include climate risk in sustainability reports or general corporate responsibility reports.
"The information that is voluntarily disclosed often lacks the material information required by a reasonable investor to properly assess companies' financial viability," Russell Read, Calpers's chief investment officer, said in prepared testimony for a Senate banking subcommittee hearing.
Also scheduled to testify at the hearing was Mindy Lubber, president of Ceres, a coalition of investors and environmental groups; Gary Yohe, professor of economics at Wesleyan University; and Jeffrey Smith, partner in charge of environmental practice at Cravath, Swaine & Moore.
Calpers, which manages more than $250 billion in assets, and other institutional investors, environmental groups and New York Attorney General Andrew Cuomo, petitioned the Securities and Exchange Commission in September to force publicly traded companies to disclose climate-related risks.
"The lack of SEC guidance on or a standardized format for climate risk disclosure has resulted in reports with very little consistency in the format or level of detail of information presented," Read said in his testimony.
Calpers and other institutional investors say they need four main disclosures to analyze a company's business risks and opportunities from climate change: emissions disclosure, strategic analysis of climate risk and emissions management, assessment of physical risks of climate change, and analysis of regulatory risks.
The groups that have petitioned the SEC will meet with agency staff in December. The petition asks the agency to immediately review the adequacy of companies' current disclosures on climate change.
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