By Douglas G. Cogan
Investors and companies are just now coming to realize how the decisions they make today will influence the climate and global economy for generations to come. To sustain economic growth, effective climate governance practices must be embraced and pursued across the investment marketplace.
That's why 28 forward-looking institutional investors, managing $1 trillion of assets, have called on the Securities and Exchange Commission to require publicly traded companies to disclose the financial risks of global warming in their securities filings. They sense a change in the wind that is making this issue a top-tier concern among investors, companies and policy-makers.
The group is trying to schedule a meeting with Christopher Cox, SEC chairman, about corporate disclosure on climate change. In the meantime, the group plans to meet with Commissioner Roel C. Campos Sept. 20.
In addressing this environmental problem, investors see a silver lining that could set the nation on a more sustainable path for energy use and economic growth. As Secretary of the Treasury Henry Paulson remarked at his recent confirmation hearings, "good economic policies go hand in hand with good environmental policies." He should know. Under his leadership at Goldman Sachs & Co., the company financed nearly $1 billion in renewable energy and clean technology projects. And in a policy adopted last November, Goldman Sachs linked climate change with other important issues such as poverty alleviation, access to clean water and adequate energy supplies.
Companies are becoming more receptive to shareholder requests asking their boards to coordinate reviews of emerging regulatory, competitive and public pressures to reduce greenhouse-gas emissions. During the past two annual meeting seasons, 32 of the 66 shareholder proposals filed on global warming resulted in withdrawal agreements whereby companies agreed to issue the requested reports or continue high-level dialogue with the proponents.