Large investors increasingly demand account of environmental risk

Large investors are starting to put heat on companies that fail to take account of their impact on the environment, a investors' study indicates.
"The financial risk of climate change and greenhouse gas emissions has swiftly become a matter of primary concern among members of the global investment community," the Carbon Disclosure Project stated. Investors "are increasingly demanding an accounting of such risk exposure from companies in which they hold shares," it said. "In turn, more global companies are acknowledging their responsibility."

The international project, representing 95 institutional investors with assets totalling $ 10 tn, noted in releasing its second survey that the growth in its membership points to the seriousness of the issue. Last year's report was completed on behalf of 35 institutions managing $ 4 tn.
"The investment community is showing a profound new awareness of its fiduciary responsibility relating to climate change, and sending an unmistakable message to corporations that their investors will no longer tolerate a lack of accountability about their exposures and practices," stated James Cameron, chairman of the London-based project.

The report includes a list of the 50 companies whose responses best addressed climate-change issues. Two Canadian corporations made that list: the Royal Bank and Suncor Energy. It also cites companies that are "behind the curve," including Microsoft, which was said to have failed to acknowledge the need for computer operating systems to reduce electricity consumption.
A dozen other major companies did not bother to reply at all to the survey, including Honeywell, Boeing, Morgan Stanley and Sears, Roebuck.
"Companies ignoring their investors will invite -- and warrant -- particular scrutiny," Cameron warned. "More than ever, investors of all sizes are making their wishes known on this key issue and are willing to reallocate their assets if necessary."

The project's members include the Ontario Teachers' Pension Plan, Acuity Investments and CI Mutual Funds from Canada, and international investment banks Credit Suisse, Merrill Lynch, UBS and State Street Global Advisors.
The report was released on the same day that the chairman of the British wing of Shell global oil group was quoted as saying he sees "very little hope for the world" unless carbon dioxide emissions are reduced. Lord Oxburgh, a geologist by training, told that "no one can be comfortable at the prospect of continuing to pump out the amounts of carbon dioxide that we are at present."