In a daylong brainstorming "summit," a dozen U.S. state treasurers and hundreds of financiers and other major investors debated ways Tuesday to pressure more U.S. companies into dealing openly with the financial risk of climate change and with ways to reduce it.
UNITED NATIONS — In a daylong brainstorming "summit," a dozen U.S. state treasurers and hundreds of financiers and other major investors debated ways Tuesday to pressure more U.S. companies into dealing openly with the financial risk of climate change and with ways to reduce it.
"Climate change poses a long-term financial and business risk for many of the companies in which we invest," said Connecticut Treasurer Denise L. Nappier, a co-chair of the event. "For us today it's all about our money."
Harvard University environmental scientist John Holdren gave the more than 300 participants an update on the latest climate research, saying it's increasingly clear that rising global temperatures caused by emissions of carbon dioxide and other "greenhouse gases" would intensify heat waves, storms, floods, droughts and wildfires in the 21st century.
"After years of debate, the scientific community has arrived at the conclusion that global warming is in fact a reality," said William C. Thompson Jr., who as New York City comptroller handles $82 billion (euro64 billion) in invested assets. "Global warming is likely to result in billions and billions of losses for public companies."
Everything from agricultural productivity to the health of the global insurance industry would be adversely affected. Big investors like the treasurers, who manage state pension funds, are particularly concerned about electricity and other energy companies, which may face government-mandated cutbacks in carbon dioxide emissions, produced when they burn coal and other fossil fuels.
"If, in fact, someone invests $2 billion in a coal-fired power plant, and the laws change -- and they will change at some point -- with those changes come perhaps hundreds of millions of dollars of stranded costs," said Mindy S. Lubber, who heads an environmentally minded investors group, CERES.
Unlike most of the rest of the world, the United States has not ratified the Kyoto Protocol, which mandates emissions cuts. But many view such U.S. controls as inevitable as evidence of warming mounts.
Investor groups, seeking fuller disclosure of risks, last year persuaded two Ohio-based power companies -- Cinergy and American Electric Power -- to issue reports examining the possible impacts and financial uncertainties of such regulation, as well as steps they're already taking to reduce emissions, such as switching to renewable fuels.
Cinergy has since been bought by North Carolina's Duke Energy, whose chairman, Paul Anderson, said last month his company would lobby for a tax on carbon dioxide emissions because "the time has come to act" on climate.
Summit participants also repeatedly focused on the "opportunities" represented by the climate threat -- in new energy technologies, for example. The General Electric Co. announced on Monday it will more than double its research investment in environmental technology over five years, with an emphasis on products to reduce greenhouse gases.
Thompson noted that in just 18 months a coalition of state and city officials representing $2.7 trillion in investments has formed around these issues, and North Carolina's treasurer called on his fellow heavyweight investors -- "as owners" -- to act aggressively and selectively.
"We should pick four or five companies that could make the most difference and give them a reasonable timetable," Richard Moore said. "We should tell them, `If you don't do this we will not own your stock.' We will be successful if we all stick together."
The meeting was sponsored by CERES and the Ted Turner-financed U.N. Foundation. Among the participants were representatives of major financial houses, foundations and university endowments, union pension funds and insurance companies.
Source: Associated Press