LONDON: A group of 70 global investors that manage more than US$3 trillion worth of collective assets, today launched the first-ever joint effort to spur the world’s top power companies to assess the financial risks of climate change, and the opportunities of transitioning to the low carbon economy. The investors sent letters to 45 of the world's biggest oil, gas, coal and electric power companies last month, in response to Carbon Tracker’s 2013 report Unburnable Carbon. The report found that in 2012 alone, the 200 biggest publicly traded fossil fuel companies collectively spent around US$675 billion on new reserves which could never be used and would become worthless, or ‘stranded assets’. Coordinated by CERES, the initiative aims to highlight the opportunity in redirecting at-risk capital to low carbon energy and clean technologies, as the investors ask how power companies are preparing for financial climate risk and the fast-growing clean energy economy. The 70 investors, which include California’s two largest public pension funds, the New York State Comptroller, F&C Management and the Scottish Widows Investment Partnership, asked for detailed responses ahead of their yearly shareholder meetings in 2014. The investors wrote: “We would like to understand what options there are for [the company] to manage these risks by, for example, reducing the carbon intensity of its assets, divesting its most carbon intensive assets, diversifying its business by investing in lower carbon energy sources or returning capital to shareholders.” “Companies must plan properly for the risk of falling demand by stress-testing new investments to minimize the risk our clients’ capital is wasted on non-performing projects”, said Craig Mackenzie, Head of Sustainability at Scottish Widows Investment Partnership. “The world is taking climate change seriously and global pressures to reduce fossil fuel use will only grow stronger. As long-term investors, we see the world moving toward a low-carbon future in which fossil fuel reserves that companies continue to develop may actually become a liability, which could take a toll on shareholder value”, commented Jack Ehnes, CEO of the California State Teachers’ Retirement System. Dr. Julie Gorte, Senior Vice President for Sustainable Investing at Pax World Management Corp, said: “There’s a real appetite among our clients to invest in companies that are innovating to address climate change. Tackling climate change is both a business risk and opportunity, so it is in the interest of energy companies and utilities to assess, disclose and develop strategies to mitigate carbon asset risk.”

1. The Climate Group
News And Blog

2. INVESTORS WORTH $3 TRILLION URGE
WORLD'S BIGGEST POWER COMPANIES
TO PLAN FOR A LOW CARBON FUTURE

3. DATE24 OCTOBER 2013
• LONDON: A group of 70 global investors that
manage more than US$3 trillion worth of
collective assets, today launched the first-ever
joint effort to spur the world‟s top power
companies to assess the financial risks of climate
change, and the opportunities of transitioning
to the low carbon economy.

4. • The investors sent letters to 45 of the world's
biggest oil, gas, coal and electric power
companies last month, in response to Carbon
Tracker‟s 2013 report Unburnable Carbon. The
report found that in 2012 alone, the 200 biggest
publicly traded fossil fuel companies collectively
spent around US$675 billion on new reserves
which could never be used and would become
worthless, or „stranded assets‟.

5. • Coordinated by CERES, the initiative aims to
highlight the opportunity in redirecting at-risk
capital to low carbon energy and clean
technologies, as the investors ask how power
companies are preparing for financial climate risk
and the fast-growing clean energy economy.

6. • The 70 investors, which include California‟s two
largest public pension funds, the New York State
Comptroller, F&C Management and the Scottish
Widows Investment Partnership, asked for
detailed responses ahead of their yearly
shareholder meetings in 2014.

7. • The investors wrote: “We would like to
understand what options there are for [the
company] to manage these risks by, for example,
reducing the carbon intensity of its assets,
divesting its most carbon intensive assets,
diversifying its business by investing in lower
carbon energy sources or returning capital to
shareholders.”

8. • “Companies must plan properly for the risk of
falling demand by stress-testing new investments
to minimize the risk our clients‟ capital is wasted
on non-performing projects”, said Craig
Mackenzie, Head of Sustainability at Scottish
Widows Investment Partnership.

9. • “The world is taking climate change seriously and
global pressures to reduce fossil fuel use will only
grow stronger. As long-term investors, we see the
world moving toward a low-carbon future in which
fossil fuel reserves that companies continue to
develop may actually become a liability, which
could take a toll on shareholder value”,
commented Jack Ehnes, CEO of the California
State Teachers‟ Retirement System.

10. • Dr. Julie Gorte, Senior Vice President for
Sustainable Investing at Pax World Management
Corp, said: “There‟s a real appetite among our
clients to invest in companies that are innovating
to address climate change. Tackling climate
change is both a business risk and opportunity,
so it is in the interest of energy companies and
utilities to assess, disclose and develop
strategies to mitigate carbon asset risk.