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
"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
"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."
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
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."
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.
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.