Climate work continues
In 2012, the Council on Ethics continued with its involvement in climate issues. The Council on Ethics’ representative participated in a two-day meeting in March with the UN climate negotiator, Christiana Figueres, regarding the role that the financial market and institutional investors can play in the transition to a low-carbon society.
The Council on Ethics has also been involved in the Institutional Investors Group on Climate Change (IIGCC) and pushed for the development of an expectation document, The Institutional Investors’ Expectations of Corporate Climate Risk Management.
The aim is for investors to provide companies with a uniform picture of what they expect companies to do to reduce risks and take advantage of opportunities that arise as a result of climate change. Companies are also encouraged to improve their management and reporting of these risks and opportunities. The document was put together with the Investor Group on Climate Change and Investor Network on Climate Risk, a network whose members are primarily in Australia, New Zealand and North America
A positive side effect of this is that the organisations mentioned above have expanded their cooperation by creating a global coalition, the Global Investor Coalition on Climate Change, to further strengthen the work.
During the year, IIGCC has focused on methane emissions from the oil and gas industry, where leakages of methane occur during various processes. In its policy work, IIGCC has focused on the current ongoing revision of the EU’s Emissions Trading Scheme (EU ETS). One of the main issues has been getting rid of the surplus of allowances in the system, so that the system can provide price signals to stimulate investment in energy efficiency and infrastructure for a low-carbon society.
Why is this initiative important?
- Climate change is expected to have a major impact on long-term returns.
- Major investments are needed to adjust to a less carbon intensive society.
- Measures need to be taken at all levels of society.
- Ambiguity of the decision makers on the measures they will take create uncertainty.
- Due to uncertainty necessary investments will not be made