February 8, 2018 Read More →

Investor-Driven Climate-Risk Transparency Is Taking Hold

S&P Global Market Intelligence:

Investors pushing companies to analyze and disclose their climate risks said they believe that those moves have set up a dynamic that will lead to changes in corporate operations.

Big investors such as BlackRock Inc. in recent years have joined the effort — through shareholder resolutions, public letters and behind-the-scenes conversations — for energy majors and top performing companies in other sectors to analyze and disclose the risks they face under the Paris Agreement on climate change, which seeks to limit global warming to no more than 2 degrees Celsius above pre-industrial levels. Many companies that are heavily invested in the mutual and index funds also want companies to establish environmental, social and governance, or ESG, operational standards. Investors use ESG criteria to screen companies in their portfolios for economically sustainable and environmentally and socially responsible operations.

“It’s not just about creating a marketplace that thrives economically,” said Tracey Rembert of Christian Brothers Investment Services Inc., which manages investment assets for a number of Catholic institutions. “Our investors care about economic justice, social justice, they care about impacts to the world’s poorest people, the most vulnerable,” she said in an interview.

Investors said 2017 marked a turning point for the climate disclosure push. Not only did shareholders of publicly traded companies pass three climate disclosure proposals that year, but the average percentage of votes cast in support of environmental measures climbed to 39.2%, from 27.5% in 2016 and 16.7% in 2015, according to The Conference Board. Exxon Mobil Corp. on Feb. 2 published its 2-degree scenario analysis after shareholders in 2017 passed a disclosure resolution by 62%, and Duke Energy Corp. plans to release a climate report in 2018.

More ($): Investors play long game in climate disclosure push

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