Big companies made to prioritise clean energy by investors
Source: Trillion Fund / Words by Rebecca Cooke
Shareholders are pushing for environmentally considerate investments in the wake of escalating climate change concerns. And investors in the US are leading the way.
Last week, 35 institutional investors in America made a coordinated effort to convince more than 100 leading companies – including Chevron, Kinder Morgan and a number of big utilities, to prioritise clean energy in their investment portfolio.
The campaign comes shortly after Tim Cook, tech giant Apple's chief executive, told a board of financial advisers “we want to leave the world better than we found it.” He also told investors not to put their money into Apple's shares if they were not interested in renewable and clean technologies.
This week, the UK's own Richard Branson, the chief executive of Virgin, backed him up: ”More businesses should be following Apple's stance in encouraging more investment in sustainability. While Tim [Cook] told sustainability sceptics to 'get out of our stock', I would urge climate change deniers to get out of our way” he said.
All signs indicate a definite move towards favouring clean energy over fossil fuels for both investors and big business.
Investors asked several companies, including Exxon Mobil and Dish Network, to set GHG reduction targets and be more honest about how they are managing climate risks in their investments. The Investors Network on Climate Risk also petitioned companies including Kraft Foods and PepsiCo requesting assessments of the company’s supply chain impact on deforestation and plans to mitigate these risks.
Timothy Smith, from Walden Asset Management in Boston said: “Investors and companies alike need to ‘raise the bar’ and expand our actions to address climate change. Investors are broadening their outreach to more companies and deepening their message to other companies on difficult climate issues such as lobbying on climate by fossil fuel companies.”
Mindy Lubber, director of the Investor Network on Climate Risk, which represents almost $11 trillion worth of assets, said: “Investors are not standing still as the climate crisis worsens. These wide-ranging resolutions reflect a deepening concern that stronger actions from companies are needed.”
Recent evidence suggests that their claims for a shift from fossil fuels to renewables have a financial basis as well as an ethical one. The petitions come weeks after German utilities giant RWE reported record losses of €2.8 billion – it's first loss in 60 years. The energy giant also admitted that it had got its strategy wrong and should have put more money into renewables rather than focusing on exhaustive fossil fuels.
Peter Terium, RWE's chief executive officer commented on the business plan saying that put too much money into coal and gas where profits are dwindling meaning conventional power stations are being closed to save costs. He said:“This trend will continue in the next few years and it is irreversible.”
The latest drive for ethical investments in the renewables sector is being reflected in the industry at large as MPs, shareholders and economists are beginning to wake up to the realities of climate change, heavy reliance on fossil fuels and the Carbon Bubble.
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