Institutional investors join energy efficiency crusade

Institutional asset managers, banks and pension funds representing more than $10 trillion in investments call for more action on corporate emissions reductions.
Written by Heather Clancy, Contributor

A total of 92 institutional investors have now signed up for the Carbon Disclosure Project's Carbon Action Initiative, representing more than $10 trillion (yes folks, trillion with a "t") in assets.

The Carbon Action Initiative is an effort designed to convince the CEOs of high-profile companies to set -- and disclose -- plans for reducing greenhouse gas emissions associated with their operations.

Some of the new investors that have signed up for the Carbon Action Initiative include ClearBridge Advisors, Banco Santander, Banesto, BBVA, Henderson and APG. The CEO of the Carbon Disclosure Project, Paul Simpson, said that investors are increasingly worried about the risks being carried by companies that are ignoring the impact of their energy usage on the climate.

"Investors were behind the drive for disclosure, and now an increasing number are telling executives they want them to go further and act to make reductions," Simpson said in the press release announcing the expanded support from institutional investors and fund managers.

The action plan calls for the companies -- there were 415 of them targeted this year, 153 with U.S. headquarters -- to do the following:

  • Set and disclose emissions targets
  • Invest in emission reduction activities
  • Demonstrate year-over-year reductions in emissions
  • Set a positive example by managing the emissions associated with their supply chains

The latter, in particular, is taking on more urgency. Research released earlier this month by the Carbon Disclosure Project and Accenture suggests that progress on reducing greenhouse gas emissions and improving energy efficiency across supply chains has been slower than anticipated.These money types are interested in energy efficiency for one major reason: the potential impact on the bottom line at the world's biggest companies.

"Most companies have cost-effective opportunities to reduce their carbon emissions, but they're not always good at exploiting them," notes Craig Mackenzie, head of the Scottish Widows Investment Partnership, explaining his group's involvement. "CDP Carbon Action is incredibly useful in helping global investors identify companies that appear to be falling behind good practice in this area, and coordinating global investor engagement."

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This post was originally published on Smartplanet.com

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