Corporate boards will feel new pressure to start taking low-carbon options more seriously, say experts, as investors begin to shift away from resources like coal that are closely linked to global warming. The Global Investor Coalition on Climate Change released a report last week revealing that 53 percent of asset managers either decided to not invest in or pulled out of listed entities because of climate change risks, which include existing and prospective regulatory changes and government support schemes in addition to physical impacts. Asset owners are paying closer attention too, with 63 percent saying they are monitoring their managers on how climate change is integrated into their investment evaluations and 69 percent factoring climate factors into their fund manager decisions. The net impact of the survey, which included a total of 84 owners and managers with collective assets topping $14 trillion, will likely be to nudge businesses away from reliance on fossil fuels and provide incentive for reducing their carbon footprints, according to Arnstein & Lehr LLP partner William J. Anaya.
Environmental groups like 350.org are pushing their own ideologically motivated divestment movement, encouraging universities, states and localities, churches, and other groups to pull their money out of the 200 publicly traded companies that hold most of the world’s fossil fuel reserves. While the activist-fueled campaign has started to receive more attention recently, those large companies may have more reason to be concerned about the investors who are moving their money elsewhere for purely financial reasons, as the Obama administration readies new greenhouse gas regulations and federal and state governments push cleaner energy options.