World's Largest Investors Urge Government Action on Climate

Flickr,Genista/CC BY 2.0

Among the developed nations, the US is the only one led by people who either deny climate change exists or feel that bringing it up will lose them too many votes. On the other hand, there are plenty of large corporations and institutional investors which address climate risk in official policy statements and through management systems. Given that corporations are capable of exerting so much control over US Federal and state government (hence the 99% movement) in so many ways, it is remarkable indeed how the Republican Party, traditionally the party of business, can slide along without recognizing the risk climate poses to business. Investors are doubling down on the cognitive dissonance and I predict this is going to shape the coming elections.

A recent Ceres story headline well outlines the doubling down of support for action: World's Largest Investors, Worth $20 Trillion, Step Up Call for Urgent Policy Action on Climate Change -Doubling in Investor Support Seen For Climate Action.

I'm less interested in the Who's Who aspects of the joint statement than I am in what was recommended for domestic policy. You can tell the joint position statement (pdf download from Ceres) was written by people who understand corporate management systems and accountability. here's a lengthy excerpt from the position statement:

Investment-grade climate change and clean energy policy is required to shift private sector investment from high-carbon to low-carbon assets. To attract private sector investment, governments need to:

1) Ensure that effective policies exist. An integrated climate change and clean energy policy framework should include:






Adaptation measures to reduce unavoidable climate impacts.

Corporate disclosure of material climate change-related risks.

2) Ensure that the policies are well designed. Experience with investing in renewable energy and energy efficiency suggests that investment-grade climate change and clean energy policy should:

Provide appropriate incentives to invest. Specifically, policy needs to recognise that investing in areas such as renewable energy and energy efficiency is not risk free, and therefore needs to be designed to allow investors to make appropriate returns relative to the risks that they are taking and the costs, risks and returns of other investment opportunities.


Be transparent. That is, it should be clear how the policy is designed and implemented (or intended to operate in the case of new legislation).

Be of appropriate duration. Investors – in particular, those making large investments in areas such as infrastructure and power generation – need long-term policy certainty. If policy instruments have a short time horizon or there is the likelihood that future governments will significantly change the policy framework, investors will tend to invest elsewhere.

Avoid retroactivity. Where governments wish to adapt or change policy they should commit to clear prospective time frames and set clear criteria for these changes.



3) Ensure the effectiveness of the institutions charged with implementing these policies. In particular, relevant regulatory or oversight bodies should have appropriate resources, and have the ability and authority to ensure that climate change and related energy policies are effectively implemented.

Go with the serendipity.
Yeah...I know: Some Koch funded think tank could probably put together a mirror opposite joint statement attacking these principals. But given the continuing dedication and expansion of the Occupy Wall Street movement, I don't think they'd have an easy time finding signatories, save for other lobbyists and think tanks.

Tags: Global Climate Change | Global Warming Solutions

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