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Will Emissions Disclosure Mean Investor Pressure on Polluters?
http://green.blogs.nytimes.com/2012/08/24/will-emissions-disclosure-mean-investor-pressure-on-polluters/[font face=Serif]August 24, 2012, 3:08 pm
[font size=5]Will Emissions Disclosure Mean Investor Pressure on Polluters?[/font]
By DYLAN WALSH
[font size=3]A new financial tool developed by the investment firm South Pole Carbon, in partnership with the Swiss Federal Institute of Technology, provides greenhouse gas emissions profiles of more than 40,000 publicly listed companies. This index is aimed at encouraging greater disclosure from companies while, hopefully, also pushing investors to build more responsible portfolios.
“Investors have long been aware that the greenhouse gas profile, especially of major emitters like electric utilities, is a potential liability,” said Paul Bledsoe, a senior adviser on energy issues at the Bipartisan Policy Center.
The natural gas industry, for example, has cited the possibility of regulation of greenhouse gas emissions by the Environmental Protection Agency to help explain its market rise next to coal’s loss of market share. And a recent open letter to the Bank of England that included signatories from Oxford University and the London School of Economics admonished the bank to “investigate how the U.K.’s exposure to high-carbon investments might pose a systemic risk to our financial system.”
Nonetheless, in the absence of strong greenhouse gas regulation, it is unclear how significantly emission patterns contribute to investor decision-making, Mr. Bledsoe said. Over the last three decades, many investors have focused increasingly on short-term returns. For those who do, the shifting winds of policy debate or the comparatively glacial process of policy development are largely irrelevant. That means such considerations tend not to surface in share value.
…[/font][/font]
[font size=5]Will Emissions Disclosure Mean Investor Pressure on Polluters?[/font]
By DYLAN WALSH
[font size=3]A new financial tool developed by the investment firm South Pole Carbon, in partnership with the Swiss Federal Institute of Technology, provides greenhouse gas emissions profiles of more than 40,000 publicly listed companies. This index is aimed at encouraging greater disclosure from companies while, hopefully, also pushing investors to build more responsible portfolios.
“Investors have long been aware that the greenhouse gas profile, especially of major emitters like electric utilities, is a potential liability,” said Paul Bledsoe, a senior adviser on energy issues at the Bipartisan Policy Center.
The natural gas industry, for example, has cited the possibility of regulation of greenhouse gas emissions by the Environmental Protection Agency to help explain its market rise next to coal’s loss of market share. And a recent open letter to the Bank of England that included signatories from Oxford University and the London School of Economics admonished the bank to “investigate how the U.K.’s exposure to high-carbon investments might pose a systemic risk to our financial system.”
Nonetheless, in the absence of strong greenhouse gas regulation, it is unclear how significantly emission patterns contribute to investor decision-making, Mr. Bledsoe said. Over the last three decades, many investors have focused increasingly on short-term returns. For those who do, the shifting winds of policy debate or the comparatively glacial process of policy development are largely irrelevant. That means such considerations tend not to surface in share value.
…[/font][/font]