http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=3873994
Fri November 21, 2003
04:54 PM ET
Investors at
UN Summit: Disclose Climate Costs
By Mark McSherry
UNITED NATIONS (Reuters)
- State treasurers and pensions funds
that help oversee $1 trillion in assets on Friday urged U.S. regulators
and business leaders to force corporations to give investors more
information on the financial risks from global climate change.
Eight U.S. state and
city treasurers and comptrollers and the
leaders of two large labor pension funds issued a "call for
action" at a day-long Institutional Investor Summit on Climate
Risk held at U.N. headquarters. Executives from top Wall Street
banks and fund management firms also attended the meeting.
The plan basically
asks the U.S. Securities and Exchange
Commission to impose tighter disclosure, reporting and risk
assessment requirements on corporations so that public pension
funds can assess more accurately the potential financial risk
to their shareholdings from climate change.
The pension funds said
a broad swath of industries could be
vulnerable to new global warming regulations or possible future
legal action.
As an example, fund
officials said any new regulation capping
emissions of carbon dioxide by industrial firms could increase
their costs substantially as they would have to use cleaner and
more expensive fuels.
In light of financial
scandals at firms like Enron Corp. and
WorldCom Inc., which have blindsided investors, "what we
want
is no surprises," said Nappier, who as the Connecticut treasurer
helps oversee $19 billion.
"We have certainly
had enough of the unexpected, and this time
we want to know up front and early on, we want to know what exposure
is down the road and what damage is being done to our investments
and to our economy," she said.
'THE DATA IS
PILING UP'
"Most of Wall
Street today seems to ignore climate risk and
feels more comfortable pretending that global warming will
not affect their portfolios," said Leon Panetta, former director
of the U.S. Office of Management and Budget.
"The data is piling
up and the trends are clear. In 2003,
it is irresponsible for any major investor or fiduciary
to ignore the risks of global warming," Panetta said,
suggesting the lawyers who filed the first lawsuits against
tobacco and asbestos firms were now looking at global warming.
"How long will
it take before someone takes a swing at an
oil company or a power company?" he asked.
Former U.S. Vice President
Al Gore, now vice chairman of
Metropolitan West Financial, attended the summit. He noted
a recent report that China was drafting ambitious fuel economy
standards for cars and trucks, to cut down on fuel use.
"We could be in
a situation where they are providing cars
to markets through the years that greatly exceed the environment
standards that we (in the United States) are used to building
toward," Gore said. "We will be behind the curve in
every way."
Pressed on whether
the public pension funds would divest
companies that did not comply with their demands, New York
State Comptroller Alan Hevesi said: "Divesting is the last
thing you want to do .... Once you divest you no longer have
an influence over the company."
However, he added:
"You might have to divest at the end of
a process and say 'this company is beyond the pale'."
###
