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March 27, 2007
Concerned Investors and Businesses Call for Congress to Pass a Carbon-Cap or Wear a Dunce Cap
    by Anne Moore Odell

A large group of institutional investors and US companies call on the federal government to pass legislation to fight climate change that includes a demand for mandated cuts in greenhouse gasses.


The time to act on global warming is now, says a formidable group of investors managing $4 trillion in assets. In a March 19th press conference held in Washington DC, a group of 65 institutional investors and US companies called on Congress to pass federal legislation to cut greenhouse gasses that lead to global warming. Organized by Ceres and the Investor Network on Climate Risk (INCR), Investors and Business for US Climate Action presented a "Climate Policy Call to Action" with detailed explanations of responses to climate change they believe need to happen on a nationwide scale.

This is the largest group of pension funds, state treasurers, state/city comptrollers, financial service firms, asset managers, foundation endowments and US companies ever to ask the Congress and federal government to act on this issue. The "Climate Policy Call to Action" compliments earlier reports addressing climate change and policies from the United States Climate Action Partnership and the Global Roundtable on Climate Change and adds to these reports as it comes from the perspective of US investors and businesses.

"We decided to join the coalition because we think climate change is the greatest environmental challenge of our time," Joe Keefe, President & CEO of Pax World Funds told Socialfunds.com. "We believe that mandatory caps on greenhouse gas emissions will help create a level playing field for businesses, so they can better address the risks while taking advantage of the opportunities associated with the transition to a sustainable energy economy."

The signers include investment heavy hitters such as Merrill Lynch and California Public Employees Retirement Systems (CalPERS) and well-known foundation endowments including The John Merck Fund and the Wallace Global Fund. State Treasurers and controllers from California, Connecticut, Kentucky, Maine, Maryland, New Jersey, New York, North Carolina, Oregon, and Vermont represented their statesí interests in signing the Call to Action.

"For the first several decades of the environmental movement, activists worked with government to regulate industry," stated Denis Hayes, President and CEO of the Bullitt Foundation in Seattle, WA. "In recent years, however, activists have increasingly been working with industry to goad the government into action. This has been true for several issues, but most visibly on global warming."

The statement asks the US government to catch up with Europe and other countries that have signed the Kyoto Protocol and have already started mandating carbon policies. Investors and Business for US Climate Action calls on Congress to create a sector-wide carbon-price as the foundation for a federal "cap-and-trade" program. The group of signers points to the far-reaching risks and opportunities of climate change and the many scientific reports that conclude that climate change is happening as a direct result of human activities. The group outlines three actions it is looking for from the federal government.

The first call to action asks long-term reductions of greenhouse gases emissions to reach 60% to 90% below the levels of 1990 by the year 2050. This would include a "cap-and-trade" system. It also asserts that a program to cut carbon would create economic opportunities.

The statementís second call to action is for a re-visioning of energy and transportation policies on a federal level to reward the research and development of clean technologies. This needs to be done on a scale large enough to reach the greenhouse gas reductions outlined in the groupís first call to action.

Anne Wagner, CEO of the Municipal Employees' Retirement System (MERS) of Michigan, responded: "Leadership on the part of the government in this area will provide a platform for innovation and new initiatives across American business."

The final call to action asks the Securities and Exchange Commission (SEC) to create guidelines on what companies should disclose about climate risk in their financial reports. The statement pronounces that the court and state level guidelines are not enough to regulate this complex issue.

"Since we are stewards over an endowment, we have to take long term views. We have to engage with the portfolio businesses to do better. We have a duty to ask companies to disclose their climate risks," said Statement signer Tim Little, Executive Director, Rose Foundation for Communities and the Environment.

"Though the challenge is significant, I believe we can all grow and prosper in a greenhouse gas constrained world. Actually, I believe there is no other option," said statement signer Alain J. P. Belda, Chairman and CEO of manufacturer Alcoa. "As an economic leader the U.S. must help lead the way."

The Statement stresses that investors and companies are thinking about their long-term competitiveness. "The scientific jury is in. Most industrialized nations and individual states such as California have passed laws to reduce greenhouse gas emissions," said Chris Fox, Director of Investor Programs at Ceres to Socialfunds.com. "What is a real problem for business is US policy uncertainty. A US national climate policy would be good for business. It would make it easier for companies and investors to plan for the future."

Ceres reports that to date there has been no response from any of the letters concerning the climate Policy Call to Action sent to President Bush, and the SEC. Against overwhelming evidence, the current government has yet to substantively address climate change risks. Every member of Congress also received a letter and so far only one has made a formal response. Massachusetts Rep. Edward Markey, Chairman of the House Select Committee on Energy Independence and Global Warming, released a press release applauding the Climate Policy Call to Action.

"At Interface, we recognize that while Climate Change is a global problem, it will take an individual solution. We as consumers and as industry leaders must take responsibility for our actions to become better stewards of our environment," explained Neel Bradham, Vice President of Business Development at Interface, Inc. "While governmental action by itself is not a silver bullet, it will be an important piece to the puzzle as industry and the government walk side-by-side to affect change."

Ceres is an assemblage of investors, environmental organizations and special interest groups that works on sustainability issues with climate change. INCR was created in 2003 when more than 250 North American Investors met at the first Institutional Investor Summit on Climate Risk in New York, NY. INCR works to help institutional investors understand the changing landscape of risks and opportunity in climate change by supporting its members it their relationships with their portfolio companies. Ceres runs and supports INCR.

 

 
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