As the Green Movement continues, more institutional investors are becoming concerned with the potential costs and risks of investing in projects that produce high amounts of carbon. This was the topic of a recent meeting of investors in New York organized by the United Nations Foundation and Ceres, a coalition of investors and environmental groups.
Investors have asked the SEC in the past to require carbon footprint disclosures, but the SEC has declined, and many companies are against such disclosures. The investors are not being altruistic; they are reacting to potential costs that could affect their investments, including 12 bills currently in Congress that would raise costs for companies that emit too much carbon. Investors what to know what is a company’s “climate risk,” which includes risks associated with the costs of carbon production, diminished reputation for not being green, and costs associated with environmental forces such as hurricanes that tend to disrupt energy-based investments.
The investors, including investment banks and pension and retirement funds, have a lot of power if they can agree on strategies for obtaining carbon footprint disclosures. The organizers of the meeting claimed those that attended collectively control trillions of dollars in capital.