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EMBARGOEDFORRELEASE:10/24/[email protected] Contact:AaronPickering,617‐247‐0700ext.148,[email protected] JamesLeaton,+44‐7841‐570‐657,[email protected] Investorsaskfossilfuelcompaniestoassesshow businessplansfareinlow‐carbonfuture Coalitionof70investorsworth$3trillioncallonworld’slargestoil&gas,coaland electricpowercompaniestoassessrisksunderclimateactionand‘businessasusual’ scenarios BOSTON,MA–October24,2013–Agroupof70globalinvestorsmanagingmorethan$3 trillionofcollectiveassetstodaylaunchedthefirst‐evercoordinatedefforttospurthe world’s40topoilandgas,coalandelectricpowercompaniestoassessthefinancialrisks thatclimatechangeposestotheirbusinessplans. RecentstudiesbytheIntergovernmentalPanelonClimateChangeandtheInternational EnergyAgencyhavesuggestedthat,inordertoachievetheinternationalgoaloflimiting globalwarmingto2˚C,theworldwillneedtolivewithinasetcarbonbudget,anda significantportionofprovenglobalfossilfuelreserveswillneedtobeleftintheground. Theworldiscurrently,however,onapathtowardglobalwarmingof4˚Cormore,whichthe WorldBankwarnedmustbeavoidedinordertopreventcatastrophicclimatechange impacts. Theinvestors,mostofthembasedintheUnitedStatesandEurope,sentletterstothefossil fuelcompanieslastmonth,requestingdetailedresponsesbeforetheirannualshareholder meetingsinearly2014.InvestorssigningthelettersincludeCalifornia’stwolargestpublic pensionfunds,theNewYorkStateandNewYorkCityComptrollers,F&CManagementand theScottishWidowsInvestmentPartnership. “Wewouldliketounderstand[thecompany’s]reserveexposuretotherisksassociatedwith currentandprobablefuturepoliciesforreducinggreenhousegasemissionsby80percent by2050,”theinvestorswrote.“Wewouldalsoliketounderstandwhatoptionstherearefor [thecompany]tomanagetheserisksby,forexample,reducingthecarbonintensityofits assets,divestingitsmostcarbonintensiveassets,diversifyingitsbusinessbyinvestingin lowercarbonenergysourcesorreturningcapitaltoshareholders.” AccordingtotheUnburnableCarbonreport,in2012alone,the200largestpubliclytraded fossilfuelcompaniescollectivelyspentanestimated$674billiononfindinganddeveloping newreservessomeofwhichmayneverbeutilized.Thisinitiativehighlightstheopportunity toredirectthiscapital,ratherthanitbeingwastedonhighcarbonassetsthatcouldbecome stranded. “Theworldistakingclimatechangeseriouslyandglobalpressurestoreducefossilfueluse willonlygrowstronger,”saidJackEhnes,CEOoftheCaliforniaStateTeachers’Retirement System(CalSTRS),thenation’ssecondlargestpublicpensionfundwith$172billionunder management.“Aslong‐terminvestors,weseetheworldmovingtowardalow‐carbonfuture inwhichfossilfuelreservesthatcompaniescontinuetodevelopmayactuallybecomea liability,whichcouldtakeatollonshareholdervalue.” “Demandforcoalhasbeenfallinginkeymarkets.Climatepolicyandeconomicchanges inAsiameanthistrendcouldsoonbecomepermanent.Analyststellusthatdemandforoil couldweakentoobeforelong,”saidCraigMackenzie,HeadofSustainabilityatScottish WidowsInvestmentPartnership–oneofEurope’slargestassetmanagementcompanies. “Companiesmustplanproperlyfortheriskoffallingdemandbystress‐testingnew investmentstominimizetheriskourclients’capitaliswastedonnon‐performingprojects.” “There’sarealappetiteamongourclientstoinvestincompaniesthatareinnovatingto addressclimatechange,”saidDr.JulieGorte,SeniorVicePresidentforSustainableInvesting atPaxWorldManagementCorp.,asustainableandresponsibleassetmanagementfirmthat servesindividuals,financialadvisorsandinstitutionalinvestors.“Tacklingclimatechange isbothabusinessriskandopportunity,soitisintheinterestofenergycompaniesand utilitiestoassess,discloseanddevelopstrategiestomitigatecarbonassetrisk.” AsofOctober23,investorshadreceivedpreliminaryresponsesfrom20companies. Detailedanswerstotheinvestors’questionswillcomeinfollow‐upresponses.Participating investorsareaskingtheirpeerstosupportthiseffort,whichisbeingcalledtheCarbon AssetRisk(CAR)initiative.TheeffortisbeingcoordinatedbyCeresandtheCarbonTracker initiative,withsupportfromtheGlobalInvestorCoalitiononClimateChange. “Fossilfuelcompaniesarethebiggestsourcesofcarbonpollutionbyfar,whichmeansthey arealsouniquelypositionedtoleadtheworldinrespondingtoglobalclimaterisks,”said CerespresidentMindyLubber,speakingduringacallwithreporterstoday. "Manyoftheresponsesinvestorshavereceivedfromthecompaniesthusfaracknowledge thatthereisalegitimateriskissuearoundcarbonreserves,andcompaniesareopento continuedengagementfromtheinvestorcommunitytodeterminethescope,”addedMark Fulton,amemberoftheCarbonTracker’sAdvisoryBoardandaCeresadviser.“Fossilfuel companieswillprovetobemoreresponsiblestewardsofcapitalinthefutureiftheytake actionnowtomanagetherisksposedbyclimatechange.” Formoreinformationoncarbonassetrisk,visitwww.carbontracker.org. ### AboutCeres Ceresisanonprofitorganizationmobilizingbusinessandinvestorleadershiponclimate change,waterscarcityandothersustainabilitychallenges.CeresdirectstheInvestor NetworkonClimateRisk(INCR),anetworkofover100institutionalinvestorswith collectiveassetstotalingmorethan$12trillion.CeresalsodirectsBusinessforInnovative Climate&EnergyPolicy(BICEP),anadvocacycoalitionofnearly30businessescommitted toworkingwithpolicymakerstopassmeaningfulenergyandclimatelegislation.Formore information,visithttp://www.ceres.orgorfollowonTwitter@CeresNews. AboutCarbonTrackerinitiative TheCarbonTrackerinitiativeisanon‐profitcompanyestablishedbyitsdirectorstoalign thecapitalmarketswitheffortstotackleclimatechange.CarbonTrackerhasdemonstrated theincompatibilityofcurrentcapitalexpenditureplansintheenergysectorwithdelivering emissionsreductionstoimproveairqualityandpreventclimatechange.Thiswascaptured inits2013report:‘UnburnableCarbon:WastedCapitalandStrandedAssets’Learnmoreat www.carbontracker.orgorfollowonTwitter@carbonbubble.
