http://query.nytimes.com/gst/abstract.html?res=F50E1EFC385F0C718EDDA80994DB404482
November 22, 2003,
Saturday
New York Times
BUSINESS/FINANCIAL DESK
Pension Funds Plan to Press Global Warming
as an Issue
By BARNABY J. FEDER (NYT) 642 words
Late Edition - Final, Section C, Page 14, Column 5
Officials controlling
some of the nation's largest pension funds
announced plans yesterday to press regulators, public companies
and Wall Street to pay more heed to the potential financial
upheaval from climate change. They said that their effort
would be coordinated through a new group, the Investor
Network on Climate Risk (http://www.incr.com/).
"In global warming,
we are facing an enormous risk to the
U.S. economy and to retirement funds that Wall Street has
so far chosen to ignore," said Philip Angelides, the treasurer
of California.
In addition to Mr.
Angelides, the founders of the network
include the New York State comptroller, Alan Hevesi;
the New York City comptroller, William Thompson; and
Denise Nappier, the treasurer of Connecticut. They were
joined by counterparts from New Mexico, Oregon, Maine and
Vermont as well as officials overseeing two major union
pension funds.
Their plans, which
they termed a "call to action," were
announced in conjunction with a meeting at the United Nations
that brought together fund managers representing more than
$1 trillion in assets and representatives from numerous
Wall Street banks and investment advisers.
The meeting was the
most elaborate effort yet by a
growing group of fund managers, shareholder advocates
and environmentalists to persuade businesses to move
more aggressively to identify and address problems
they might face from global warming, increasingly
frequent extreme weather and other climate changes
that have been linked to the rapid buildup in the
atmosphere of carbon dioxide and other heat-trapping
gases.
The meeting was addressed
by both Kofi Annan, the secretary
general of the United Nations, and the former vice president,
Al Gore, who said, "This is not business as usual
- the relationship between the human species and the
planet on which we live has been utterly transformed."
Investment managers
who attended the meeting said they had
no trouble agreeing that the challenge was a daunting one.
But many fund managers were uncertain how the climate change
projections reviewed at the start of the meeting could
translate into investment strategy. One recounted his
experience setting up a fund at the request of two clients
in 1990 to invest in companies that were developing
environmentally beneficial products or doing business
in a more environmentally sound way than their peers.
The clients asked him to shut the fund down just more
than two years later when it failed to do as well as
the rest of the stock market.
Abby Joseph Cohen,
managing director at Goldman Sachs, noted
the public was not yet rewarding sensitivity to climate issues
in the marketplace or at the polls. "Someone's obviously
buying
and driving those S.U.V.'s, and they are voting," she said.
But others like Mr.
Angelides argued that responsible pension
fund managers had a legal responsibility to take a longer view.
He said managers had to prod businesses to study the issue more
and report more, invest in companies positioned to profit from
climate change, put some of their money into funds that screen
businesses for socially responsible behavior, and, if they own
real estate, look to reduce the environmental impact of their
buildings.
The Investor Network
founders said that one of their first
moves would be to press the Securities and Exchange Commission
to require more disclosure in corporate filings of climate
risks and to give investors more leeway in forcing companies
to allow shareholder resolutions on the subject at annual
meetings.
None of the activists
said that they planned to divest
themselves of the stocks of companies they viewed as lagging
on climate concerns. Mr. Hevesi called divestment the last
resort.
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