Grossman Pushes Fossil Fuel Companies To Assess Climate Change
Joins 70 Other Large Investors, Using Pension Fund to Encourage Corporate Responsibility
Treasurer Steve Grossman, Chairman of the Pension Reserves Investment Management (PRIM) Board, today joined a group of 70 other large investors in calling on 45 of the world’s largest oil & gas, coal and electric power companies to assess the financial risks that climate change poses to their businesses. The group has investments totaling approximately $3 trillion, many of them in the fossil fuel industries.
“By joining together and combining our voices, we’re sending a clear and powerful message to the fossil fuels industries – as investors, we not only want strong shareholder value, but also responsible environmental practices,” said Grossman. “Given the trend toward a low-carbon future, these companies need to reassess their long-term goals in the interests of their ongoing sustainability and profitability.
Most of the large investors are based out of the United States and Europe, and many of them are pension funds like the one that Grossman oversees. The group includes California’s two largest public pension funds, the New York State and New York City Comptrollers, and pension funds in several New England states such as Vermont, Connecticut, and Rhode Island.
Recent studies have suggested that the world is on a path toward global warming of 4 degrees Celsius or more, double the international goal of limiting global warming to 2 degrees Celsius. According to the World Bank, catastrophic climate change impacts could be triggered by hitting that higher level. Studies by the International Energy Agency and other groups show that as policies to tackle climate change take hold, major portions of oil and coal companies’ reserves could lose value, creating a financial risk for these companies and their investors. The outreach effort, called the Carbon Asset Risk (CAR) Initiative, is being coordinated by Ceres and the Carbon Tracker Initiative.
“We’re pleased with the Massachusetts Treasurer’s support to this timely effort.” said Mindy Lubber, president of Ceres, a Boston-based nonprofit group that works with business and investors on sustainability issues. “The question investors are asking of oil and coal companies is this: What’s your plan B for operating in a future global economy where clean energy has a bigger role and much of the world’s remaining fossil fuel reserves have to stay in the ground?”
The CAR initiative is requesting detailed responses from the 45 fossil fuel companies before their annual shareholder meetings in early 2014.
Treasurer Grossman said that environmental sustainability has been an integral part of his management approach, both in public and private life. Under his direction in 2007, his family business, Grossman Marketing Group, began using wind power credits to offset its previous use of fossil fuel.