Investors urge more company action on warming

Oslo, Oct 11: Investors from California to Australia representing trillions of dollars in assets urged companies on Wednesday to take more account of the long-term risks of global warming.

Fourteen groups, including major pension funds, UN groups and other specialist organisations, offered guidelines on issues such as monitoring corporate emissions of greenhouse gases or factoring in risks such as heatwaves or rising seas.

''Climate change presents a series of material business risks and opportunities which investors must take into account,'' said Peter Scales, chairman of the Institutional Investors Group on Climate Change which coordinates European investors with assets of more than 2 trillion euros.

The 14 also included leading pension funds in the United States, such as the California Public Employees Retirement System, other major pension funds in Britain and Australia, the UN Environment Programme's Finance Initiative and others.

''More investors than ever recognise that climate change is a serious business issue and are demanding better disclosure,'' said Mindy Lubber, President of Ceres which directs the US Investor Network on Climate Risk with 3 trillion dollars in assets.

The investors worry that companies often focus on short-term profits without worrying about longer-term risks such as a warming widely blamed on a build-up of gases from burning fossil fuels in factories, power plants and cars.

GAS EMISSIONS

A 9-page Global Framework for Climate Risk Disclosure (www.ceres.org or www.incr.com) by the 14 groups said companies need to provide an overview of past, present and future greenhouse gas emissions.

It said they should also make a ''strategic analysis of climate risks and emissions management''. Companies should disclose, for instance, climate targets and whether executives' pay was linked to reaching climate goals.

And it said companies should assess physical risks -- ranging from possible health effects of higher temperatures to the risks of rising seas on coastal factories.

Firms should also identify risks and opportunities from changing legislation, such as carbon dioxide trading, it said.

The scientific panel that advises the United Nations says that a build-up of greenhouse gases could bring more floods, droughts, heatwaves and disease, and raise sea levels by up to 9-88 cm in the 21st century.

In many cases, cutting emissions would help businesses.

''A lot of companies say 'this doesn't apply to us','' said Jim Coburn, a programme advisor at Ceres. ''But all companies need to be aware of the problems and reduce emissions.'' He said that almost all companies could save money via energy efficiency, such as better heating and lighting. European companies were generally doing more than US companies.

Still, a report by environmental group Friends of the Earth said the number of U.S. companies disclosing climate change risks had roughly doubled, to 49 per cent of more than 100 companies surveyed, over the past 5 years.

Backers of the framework include corporate schemes, such as the Global Reporting Initiative (GRI) and the Carbon Disclosure Project.

About 1,000 companies follow GRI guidelines, including Microsoft, Shell and Petrobras.

REUTERS