greenhouse gas (GHG) emissions alongside their financial reporting. Or from the
UK Companies Act 2006 (Strategic Report and Directors’ Report) Regulations
2013 which require all UK quoted companies to report on their greenhouse gas
emissions as part of their annual Directors’ Report, which affects all UK incorp -
orated companies listed on the main market of the London Stock Exchange. Or
from the wave of shareholder activism that has emerged over the last ten years.
The year 2005 saw a record number of shareholder resolutions on global warming.
State and city pension funds, labour foundations, religious and other institutional
shareholders filed 30 global warming resolutions requesting financial risk and
disclosure plans to reduce GHG emissions. This is three times the number for
2000–2001 (Newell, 2008).
Disclosure is the first and necessary step to applying and enforcing pressure on
corporations to disinvest in fossil fuels, and there is growing evidence of successful
disinvestment campaigns targeted at governments, corporations and universities.
To date, 22 cities, 2 counties, 20 religious organizations, 9 colleges and universities
and 6 other institutions have signed up to rid themselves of investments in fossil
fuel companies, and Norway’s US$815 billion sovereign wealth fund – the world’s
largest – has already halved its exposure to coal producers. In addition to these
disvestment announcements, many major banks and financial institutions have
limited or halted their lending to coal projects (Ecowatch, 2014).
There is also evidence of some interesting alliances emerging between environmentalists and finance capital. Examples include the Carbon Disclosure Project
(CDP) that works with 655 institutional investors holding US$78 trillion in
assets to help reveal the risk in their investment portfolios and aims ultimately to
sensitize investors to climate change as an opportunity as well as a threat. Michael
Jacobs (2012b) refers to the ‘stranded assets’ that many investors may be left
with if states get serious about climate change and force companies to leave the
‘oil in the soil’ and the ‘coal in the hole’ if ambitions to keep warming below
2 degrees are to be achieved. By some calculations, between 60 and 80 per cent
of coal, oil and gas reserves of publicly listed companies are ‘unburnable’ if the
world is to have a chance of not exceeding global warming of 2°C. Disclosure
strategies such as these provide one means of repositioning investments currently
viewed as assets rather as liabilities (Newell and Paterson, 2010). In the words of
Carbon Tracker which is advancing this approach, ‘the two worlds of capital markets
and climate change policy are colliding’ because major institutional investors are
starting to think about these issues such that ‘there will be increasing pressure from
stakeholders for explanations about how capital is being allocated’ (Carbon Tracker,
2013).
It is not that these actors do, or have to care about climate change. The question
is whether most investors care what they are investing in as long as they get a
return. Some 60 per cent of trading on stock exchanges is high-frequency trading
where automated systems are used to track price changes and follow them
(MacKenzie et al., 2012). If technologies and services in the low-carbon economy
Green transformations in capitalism 79
UK Companies Act 2006 (Strategic Report and Directors’ Report) Regulations
2013 which require all UK quoted companies to report on their greenhouse gas
emissions as part of their annual Directors’ Report, which affects all UK incorp -
orated companies listed on the main market of the London Stock Exchange. Or
from the wave of shareholder activism that has emerged over the last ten years.
The year 2005 saw a record number of shareholder resolutions on global warming.
State and city pension funds, labour foundations, religious and other institutional
shareholders filed 30 global warming resolutions requesting financial risk and
disclosure plans to reduce GHG emissions. This is three times the number for
2000–2001 (Newell, 2008).
Disclosure is the first and necessary step to applying and enforcing pressure on
corporations to disinvest in fossil fuels, and there is growing evidence of successful
disinvestment campaigns targeted at governments, corporations and universities.
To date, 22 cities, 2 counties, 20 religious organizations, 9 colleges and universities
and 6 other institutions have signed up to rid themselves of investments in fossil
fuel companies, and Norway’s US$815 billion sovereign wealth fund – the world’s
largest – has already halved its exposure to coal producers. In addition to these
disvestment announcements, many major banks and financial institutions have
limited or halted their lending to coal projects (Ecowatch, 2014).
There is also evidence of some interesting alliances emerging between environmentalists and finance capital. Examples include the Carbon Disclosure Project
(CDP) that works with 655 institutional investors holding US$78 trillion in
assets to help reveal the risk in their investment portfolios and aims ultimately to
sensitize investors to climate change as an opportunity as well as a threat. Michael
Jacobs (2012b) refers to the ‘stranded assets’ that many investors may be left
with if states get serious about climate change and force companies to leave the
‘oil in the soil’ and the ‘coal in the hole’ if ambitions to keep warming below
2 degrees are to be achieved. By some calculations, between 60 and 80 per cent
of coal, oil and gas reserves of publicly listed companies are ‘unburnable’ if the
world is to have a chance of not exceeding global warming of 2°C. Disclosure
strategies such as these provide one means of repositioning investments currently
viewed as assets rather as liabilities (Newell and Paterson, 2010). In the words of
Carbon Tracker which is advancing this approach, ‘the two worlds of capital markets
and climate change policy are colliding’ because major institutional investors are
starting to think about these issues such that ‘there will be increasing pressure from
stakeholders for explanations about how capital is being allocated’ (Carbon Tracker,
2013).
It is not that these actors do, or have to care about climate change. The question
is whether most investors care what they are investing in as long as they get a
return. Some 60 per cent of trading on stock exchanges is high-frequency trading
where automated systems are used to track price changes and follow them
(MacKenzie et al., 2012). If technologies and services in the low-carbon economy
Green transformations in capitalism 79