Shareholders Use Climate Risk Profiles to Scrutinize Investments

A coalition of nearly 300 faith-based institutional investors representing over $100 billion in invested capital has compiled "climate risk profiles" on more than 150 corporations that are the subjects of 2009 shareholder resolutions filed by faith-based investors, public pension funds and other responsible investors.

The Interfaith Center on Corporate Responsibility used data from Trucost, an independent environmental data company, to create the climate risk profiles on companies such as AT&T, the telecommunications company; energy companies such as ExxonMobil; and Yum! Brands, which operates or licenses A&W, Taco Bell, KFC, Pizza Hut, and Long John Silver's restaurants.

Leslie Lowe, director of the ICCR Energy and the Environment program, said, "We believe that every company has an obligation to reduce its greenhouse gas emissions and the risk they pose to investors, society and the Creation."

The shareholder resolutions cover a wide range of issues, including climate change, and were filed with companies in all sectors of the economy in preparation for upcoming annual general meetings, which many corporations hold in the spring.

The coal-fired Potomac River Generating Station in the city of Alexandria, Virginia is owned and operated by Mirant, Inc., one of the companies profiled by Trucost. (Photo courtesy City of Alexandria)

The climate change indicators for the companies were developed using data from Trucost, which maintains the world's largest record of greenhouse gas emissions, as well as over 700 environmental indicators including water use, waste disposal and pollutants that cause smog and acid rain.

Dr. James Salo, Trucost vice president of strategy and research, said, "The profiles provide an essential starting point for investors to learn about the climate risks and opportunities that exist within their portfolios."

Each of the climate risk profiles takes into account whether or not a company discloses the greenhouse gas emissions from its operations and the percentage of the company's deviation in greenhouse gas emissions from the sector average compared to its closest industry peers.

For companies that do not disclose greenhouse gas emissions, Trucost calculates their emissions based on its research and methodology.

Laura Berry, executive director of ICCR, said, "As institutional investors representing faith-based organizations, ICCR's members have consistently been at the vanguard of the corporate social responsibility movement."

"By holding corporations accountable through sophisticated yet easy-to-use tools such as these climate risk profiles based on Trucost data, ICCR members continue to make significant contributions to global justice and sustainability," she said.

Lowe said ICCR'S goals in publishing the climate risk profiles are to increase awareness among institutional and individual investors of climate risk in their portfolios and identify companies that are "best in sector" and the available options for investors to reduce their carbon exposure without changing sector diversification strategies.

"We also hope to provide an empirical basis for assessing corporate efforts to reduce climate risk and to end 'greenwashing' about global warming," she said. "Investors need greater transparency from corporations about their greenhouse gas footprint and what they are doing to reduce climate risk and to enhance investor value by becoming cleaner and greener."

Click here for basic climate risk profiles on more than 150 companies.

Copyright Environment News Service (ENS) 2009. All rights reserved.