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April 19, 2005
Climate Change Offers Opportunities: An Interview with Tim Wirth, President of the UN Foundation
    by Mark Thomsen

At the Ceres conference in Boston last week, SocialFunds.com sat down with Tim Wirth to discuss the opportunities for companies presented by the climate change issue.


The UN Foundation has been steadily chipping away at some of the world's most intractable problems since Ted Turner made headlines in 1997 by donating $1 billion toward its establishment. The Foundation has a mission of promoting a better and more just world through the support of the United Nations. Environment is one of the Foundation's four major program areas, and under the environment heading the Foundation promotes initiatives that target biodiversity and climate change issues.

It was on the topic of climate change that the UN Foundation's president, Tim Wirth, addressed the audience at the Ceres annual conference last week in Boston. Ceres is Boston-based nonprofit that works with investment funds, companies, and environmental organizations, among others, with the goal of creating a more sustainable world. Among its accomplishments, Ceres launched the Global Reporting Initiative in 1997.

The UN Foundation is supporting Ceres on climate change programs on both the investor side and the corporate side. Investor-side programs include the Investor Network on Climate Risk (INCR), which is working to promote a better understanding among institutional investors of the risks posed by climate change. Corporate-side programs include the Electric Power dialogue, which brings together electric power companies, environmental experts, and investor firms to examine the financial issues climate change poses for the electric power sector.

Mr. Wirth, a former US representative and senator from Colorado, has been leading the Foundation since its inception. In his address, Mr. Wirth focused on the opportunities that climate change can offer to companies, especially those in the automobile and energy sectors. SocialFunds.com sat down with Mr. Wirth to further discuss those topics.

SocialFunds.com: Why should companies be paying attention to the climate change issue?

Mr. Wirth: I think the climate issue is the most interesting political, economic, diplomatic, and environmental issue in the world. But coming out of it are more than just a lot of problems. I think there a number of significant opportunities arising as well. There are going to be very significant changes to the transportation industry, both in the automobiles themselves and in the fuels that are used. This presents a path to saving the auto industry in the US.

[Climate change] is also a major opportunity in the agricultural area. There is a broad coalition coming together around developing biofuels; it has got real legs for the first time.

SocialFunds.com: What does this mean for investors?

Mr. Wirth: Investors ought to be looking at not only what the opportunities are from an investment perspective, but also what is the downside risk. When you look at the automobile industry, are you going to pick the companies that are taking advantage of these opportunities or the ones that are going to continue to freefall?

On the other hand, much of the leadership in the agricultural industry is now coming around rapidly. The utility industry, however, is mixed. Some of the people in utilities clearly understand what the opportunity is in climate change. Others continue to resist. There are major implications. Work has to be done to upgrade the grid, but without agreement in the utility industry that is not going to happen. If we miss that opportunity, we are going to have more blackouts and problems.

SocialFunds.com: Why are some companies not seeing the opportunities?

Mr. Wirth: People just don't understand. It's changing business as usual. This country is a very conservative country - it's hard to get change. The most compelling example is our auto industry. There is a whole lineup of progressive forces who want to join with the industry to help save it. But then you have the leadership that doesn't seem to understand where the industry is. They keep blaming the problem on overcapacity, for example. Toyota and Honda face the same overcapacity problem that Ford and General Motors face. It's a global overcapacity problem.

Leadership is a problem in the utility industry too. While there are some terrific individuals in the utility industry, it appears to me that the lowest common denominator has set in and the industry does not have the kind of overall direction it could have, or should have.

 

 
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