For the first time, dozens of institutional investors managing $4 trillion in assets today called on U.S. lawmakers to enact strong federal legislation to curb the pollution causing global climate change. Joined by a dozen leading U.S. companies, the investor group outlined the business and economic rationale for climate action as they called for a national policy that reduces greenhouse gas emissions consistent with targets scientists say are needed to avoid the dangerous impacts of global warming.
The group, organized by Ceres and the Investor Network on Climate Risk, issued a Climate Call to Action at a press conference today in Washington DC. The 65 signers include institutional investors and asset managers such as Merrill Lynch, Allianz and the California Public Employees Retirement System (CalPERS), as well as leading corporations such as BP America, PG&E, DuPont, Alcoa, Sun Microsystems and National Grid. (See full list below)
In endorsing the statement, investors and companies sent a strong message that climate policy uncertainty and the lack of federal regulations may be undermining their long-term competitiveness because it is preventing them from investing in clean energy and climate-friendly technologies and practices.
“Global warming presents enormous risks and opportunities for U.S. businesses and investors,” said Fred R. Buenrostro, chief executive officer at CalPERS, the country’s largest public pension fund with $230 billion in assets. “To tap American ingenuity and drive business to a leadership position in the low-carbon future, we need regulations to enable the markets to deploy capital and spur innovation.”
“Investors and companies are asking Washington to set a clear policy direction to address the risks of climate change,” said Ceres president Mindy S. Lubber, whose organization also directs the Investor Network on Climate Risk. “The greatest climate risk facing investors and business is the uncertainty caused by the absence of U.S. policy.”
Climate change presents far-reaching risks and opportunities for businesses and investors. Some companies in sectors such as electric power, oil and automotive will face high financial risks from carbon-reducing regulations if they are not prepared to act. Insurance companies and businesses with infrastructure in places vulnerable to extreme weather events also face financial exposure. On the flip side, climate change presents significant economic opportunities for businesses that invest in new technologies and products to save energy and reduce greenhouse gas emissions.
Citing these trends – as well as recent scientific reports concluding that climate change is taking place and that human activities are the primary contributor – investors and companies called for the following three actions:
• A realignment of national energy and transportation policies to stimulate research, development and deployment of new and existing clean technologies at the scale necessary to achieve GHG reduction goals.
• The Securities and Exchange Commission (SEC) to clarify what companies should disclose to investors on climate change in their regular financial reporting.
“As institutional investors focused on the long-term financial performance of a company, we expect a thorough analysis of all significant business liabilities,” said Connecticut State Treasurer Denise L. Nappier. “Leading companies have already made progress working to not only assess and report the risks posed by climate change, but to also set in place strategic plans to foster future growth and success. In the face of mounting evidence demonstrating the economic implications of climate change, we strongly urge the SEC to acknowledge it as a material consideration and require all companies to disclose its impact to shareholders.”
“Allianz SE believes it is essential to put a price tag on carbon, thereby enabling market mechanisms to drive emissions reductions and climate protection,” said Joachim Faber, member of the Board of Management at Allianz SE, which manages $1.6 trillion of assets. “Despite challenges in the application of the European carbon emissions trading system, we firmly believe that appropriately structured carbon cap and trade programs play a central role in addressing the challenge of global climate change.”
“The lack of a national climate policy is hindering the business community’s ability to respond,” said Jack Ehnes, chief executive officer of the California State Teachers Retirement System (CalSTRS). “In addition to providing a clear regulatory roadmap, Congress needs to realign energy and transportation policies to stimulate new technologies that will enable us to achieve dramatic greenhouse gas reductions.”
“The investor and the business community are demonstrating that they are ahead of the political process. Like most responsible observers, they’ve seen the science and know it is real and must be responded to,” said Timothy E. Wirth, president of the United Nations Foundation. “Through their actions, they are demonstrating that preventing climate change isn’t just good for the planet; it is an opportunity to bolster the bottom line. Now it’s time for the policy makers to join this great global effort.”
The 65 signatories are as follows:
Pension Funds, Labor, State Treasurers, State/City Comptrollers
• Gerald W. McEntee, President, American Federation of State, County and Municipal Employees
• Bill Lockyer, California State Treasurer
• Fred Buenrostro CEO, California Public Employees’ Retirement System
• Jack Ehnes, CEO, California State Teachers’ Retirement System
• John Chiang California State Controller
• Denise L. Nappier, Connecticut State Treasurer
• Jonathan Miller, Kentucky State Treasurer
• Sean Harrigan, President, Los Angeles Fire & Police Pension Commission
• David G. Lemoine, Maine State Treasurer
• Nancy K. Kopp, Maryland State Treasurer
• Ann Wagner, CEO, Municipal Employees Retirement System of Michigan
• Bradley I. Abelow, New Jersey State Treasurer
• Orin Kramer, Chair, New Jersey State Investment Council
• William C. Thompson, Jr., Comptroller of the City of New York
• Thomas P. DiNapoli, New York State Comptroller
• Richard Moore, North Carolina State Treasurer
• Randall Edwards, Oregon State Treasurer
• Steve Abrecht, Executive Director, SEIU Master Trust Fund
• Bruce Raynor, President, UNITE HERE
• Leo W. Gerard, International President, United Steelworkers of America
• Jeb Spaulding, Vermont State Treasurer
• Joseph A. Dear, Executive Director, Washington State Investment Board
Contact: Peyton Fleming, Ceres, 617-247-0700 x20
or 617-733-6660 cell
Peter Kelley, 202-270-8831 cell