Why the number has fallen since is a question open to interpretation. But fallen it has.
The logic of investing in low-emitters might have sent an important signal at the time, especially given that traditional energy companies were prioritizing profits over any efforts to move away from fossil fuels. But today the biggest emitters — big oil and power companies for example — are tuning into market signals that tell them they ignore climate change at their peril. Asset managers would do well to follow suit.
Rewarding companies that are moving quickly to diversify, and holding the laggards accountable, might actually serve everyone's best interests in the long run. After all, the world has the most to gain from the biggest emitters changing their ways.
Imagine the virtuous feedback loop that could result if, say, British Petroleum's successful efforts to curb its pollution by 25% in only five years was looked at as a positive economic indicator rather than a cynical attempt to get good press. If investors saw BP's move as a potential hedge against future climate risk, and rewarded the company appropriately, a signal would be sent: do more of this and even more investments will follow. That signal would then be heard by every BP competitor that wasn't currently doing its all to mitigate risk; as it spread, the signal and the feedback loop it feeds would only get stronger.
There are plenty of large companies that are making significant strides to improve and diversify their energy mix, reduce their supply-chain emissions or implement distributed energy systems in their manufacturing facilities. The challenge is in identifying which of those changes will lead to not just short-term results, but also long-term reductions in exposure and gains in the bottom line. Investors who can predict those profits long before they materialize in earnings reports would have something akin to a climate-risk crystal ball.
The signals are already bubbling up from the companies that want to promote their foresight. Now they must be met by a downward deployment of data that can properly identify what that foresight means for their future financials.
Take United Continental Holdings Inc., for example. In 2014, the airline saved $343 million through initiatives it took to reduce its use of fuel. That same year, the airline posted record profits and saw a corresponding bump in stock price. But the effect wasn't just felt in the short term.
Last year, every major American airline but one saw its stock go down. The lone exception was United, which was better able to weather rapidly rising fuel costs, in part because of the investments it had made years earlier.