Investors Climate Change Risk Disclosure
Investor group unveils risk-disclosure guidelines
Greenwire, 11 October 2006 – A coalition of 14 major institutional investors and other organizations that represent trillions of dollars in combined assets published a climate risk-disclosure framework today to help companies determine what information they should provide to investors on the financial risks posed by global warming.
The so-called Global Framework for Climate Risk Disclosure framework is divided into four key areas: measurement of current and projected greenhouse gas emissions from operations and products; strategic analysis of climate risk and carbon emissions management; assessment of the physical risks of climate change; and risk analysis related to emerging greenhouse gas regulations in the United States and other countries.
Among the groups that created the framework are the Carbon Disclosure Project, Investor Network on Climate Risk, Ceres and Global Reporting Initiative.
Institutional investors that have endorsed the framework — including the California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System — say they will use the document to press companies to use existing sustainability reporting mechanisms, such the Carbon Disclosure Project, a greenhouse gas emissions questionnaire sent to more than 2,100 global companies this year.
The investors said they also plan to distribute the framework to securities regulators and investors, as well as companies that have not responded to past investor requests for environmental information.
Jim Coburn, a project manager with Boston-based Ceres, called the framework an “investor statement” that is aimed at standardizing the Global Reporting Initiative’s new G3 guidelines and other reporting mechanisms that measure companies’ environmental and financial performance.
“Companies need to provide accurate and timely disclosure of the risks associated with climate change,” said Rob Feckner, board president of CalPERS, which manages $208 billion in assets, making it the nation’s largest public pension fund.
Mindy Lubber, director of the Investor Network on Climate Risk that includes 50 large investors who manage a collective $3 trillion in assets, said an increasing number of investors regard climate change as a “serious business issue.”
“These new guidelines will help ensure that investors receive comprehensive and consistent climate-related disclosure from companies,” added Lubber, who also serves as Ceres’ president.
11 Oct 2006