Climate Change Tracker North America Oct 09

8/14/2019 Climate Change Tracker North America Oct 09

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Key findings:

North American companies that arevery high or high impact for climatechange:

are performing near the level ofglobal peers in their overallresponse to climate change: 19%have a good response compared to 23%at the global level; 91% have a

corporate-wide climate change policycompared to 93% at the global level;57% commit to short-term targetscompared to 62% at the global level.

lag behind substantively in certainareas of response: 16% commit tolinking remuneration to GHG emissionsreductions compared to 28% at theglobal level; 43% have policiescommitting to address climate changeimpact of their products compared to

71% at the global level; 9% have settargets to reduce climate change impactof their products compared to 19% atthe global level.

overall provide poorer qualitydisclosure on climate changecompared with global peers,

although provide comparabledisclosure in some areas: 37% haveadvanced or good disclosure comparedto around 50% at the global level; 35%

meet external verification of datacompared to 51% at the global level;80% report absolute emissionscompared to 84% at the global level;72% disclose scope of data compared to81% at the global level

EIRIS 2009 Climate Change Tracker: NorthAmerica

Introduction

As the US makes headway in passingnational climate change legislation and thereis an indication Canada may follow, howcompanies in these countries are addressingclimate change will become even morerelevant for asset owners and managers.

Historically, emissions for the US and Canadahave been rising. The US had the tenth andCanada the third largest emissions increaseof total greenhouse gas (GHG) emissionsfrom 1990 to 2006 among signatories to theUnited Nations Framework Convention onClimate Change (UNFCCC). 1

Canada reported 751,974 gigagram (Gg) ofCO2 equivalent emissions in 2006, a 54.8%increase from base year 1990. Based on a2009 national inventory report, filed by

Environment Canada with the UnitedNations, after a slight dip during 2004-06,Canada's total emissions increased. This isdue mainly to Alberta's oil sands, an increasein the number of vehicles on the road, andgreater reliance on coal-fired electricity.Canadas emissions are 33.8% above itsKyoto commitment and have climbed morethan any G8 nation since 1990.2

The US reported 6,087,487 Gg of CO2equivalent emissions in 2007, a 15.8%increase from base year 1990.3 Additionally,the US Energy Department reported thatGHG emissions increased by 1.4% in 2007after a decline in 2006 This was attributed bythe report to a colder winter and warmersummer.4 Further to this, according to a2009 Carbon Disclosure Project report, theUS accounted for 31% of total disclosed(direct and indirect) GHG emissions from theGlobal 500 companies.5

While the US is the greater emitter, Canadais showing substantial increases in

emissions. Both countries have a key role toplay in addressing climate change at theinternational level.

In August 2009, EIRIS completed a study onthe corporate response to climate change ofthe 300 largest cap global companies in theFTSE All World Developed Index. Earlier inMay it produced a regional update focusingon Asian companies listed in the index. Thispaper analyses the current corporateresponse to climate change of North

American companies (Canada and US) in theFTSE All World Developed Index.


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Context

Energy use composition - Energy use inNorth American countries accounted for

about 22% of global energy use in 2006 withthe US comprising approximately 19% ofglobal energy use.6 Comparatively Chinacomprised 16% of global energy use in2006.7 The extent of US energy use indicatesthat it will remain an important country inaddressing climate change at theinternational level.

The majority of the energy use for both USand Canada stems from the industry andtransport sectors. While Canadas use is

fairly evenly distributed between thesesectors, a substantial amount (41%) of USenergy use comes from the transport sector.

Fig. 1 P roportion of sectors in energy use

of Global and North American counries

(2006)

0% 20% 40% 60% 80% 100%

Canada

US

Global

Industry Transport Residential Commercial and Public Service Other

National policies in North Americancountries

United States has not yet enactedfederal regulation setting reductiontargets for greenhouse gas (GHG)emissions. However, on 26 June 2009,the US House of Representativesapproved the American Clean Energy andSecurity Act of 2009 (ACES). The bill, ifapproved by the Senate, wouldimplement caps requiring reduction ofaggregate GHG emissions for all coveredentities to 3% below 2005 levels by2012, 17% below 2005 levels by 2020,

42% below 2005 levels by 2030 and 83%below 2005 levels by 2050. The bill also

establishes economy-wide goals for allemitting sources.8

At the end of September 2009, the Senate

introduced its own climate change bill, TheClean Energy Jobs and American Power Actwhich is similar to the bill passed by theHouse. However, one of the majordifferences between the bills is the Senatebills stricter interim targets for coveredsources: A 20% reduction from 2005 levelsin 2020 compared to a 17% reduction in theHouse bill.9 If the bill passes in the Senate itwill have to be reconciled with the House billbefore moving forward.10

On 10 March 2009, the EnvironmentalProtection Agency (EPA) proposed a rulethat requires mandatory reporting ofgreenhouse gas (GHG) emissions fromlarge sources in the US. The ruleproposes that suppliers of fossil fuels orindustrial greenhouse gases,manufacturers of vehicles and engines,and facilities that emit 25,000 metrictons or more per year of GHG emissionssubmit annual reports to the EPA. Thefirst annual report would be submitted toEPA in 2011 for the calendar year 2010,

except for vehicle and enginemanufacturers, which would begin

reporting for model year 2011.11

In addition, the American Recovery andReinvestment Act of 2009 (Recovery Act)enacted 17 February 2009 allocatesabout USD 42 billion in energy relatedinvestments; USD 21 billion invehicles/transportation spending (transitassistance, energy efficient fleets, etc.);and about USD 570 million in climatescience research spending. It also aimsto provide USD 21 billion in energy-related tax incentives such as extendingthe renewable energy production taxcredit and an additional USD 1.6 billion inClean Renewable Energy Bonds.12

Canada passed Bill C-288 on 14February 2007 which intended to ensureCanada met its obligations under theKyoto Protocol and accordingly requiredthe government to develop a climate

change plan, appropriate regulation andreduction targets.13 The federalgovernment did not support the bill and

Source: International Energy Agency


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had previously stated that Canada wouldnot meet its Kyoto targets.14Canadadoes currently have proposed federalclimate change legislation that would set

targets of reducing GHG emissions 20%below 2006 levels by 2020 and 70%below 2006 levels by 2050.15 However, interms of implementation, on 28 May2009, Environment Minister Jim Prenticestated that Canadian rules limitingindustrial greenhouse gas emissions willnot be developed until the following yearand will not take legal effect for up to sixyears in order to coordinate with aproposed US timetable.16

As the US biggest trading partner andtop energy supplier, Canada will bedirectly affected by the GHG emissionsregulation passed in the US. Prentice hasstated that his goal is to ensure that thetwo countries policies are compatible.However, while the US proposed climatechange legislation is based on a cap andtrade system, the Canadian governmentis looking at an emissions intensityreduction system which would not includecaps. 17

If the US cap-and-trade system includeslimiting imports from countries withweaker climate-change rules, Canadamay be forced to implement morestringent emissions rules. The oil sands inAlberta, the biggest deposit ofhydrocarbons outside of Saudi Arabia,are another factor for both countries. Theprocess of extracting petroleum from oilsands emits more greenhouse gasemissions than conventional oil drilling.The US obtains almost a fifth of its crudeimports, or 2.5 million barrels a day,from Canada. As oil prices rise, the bulkof this may in the future come from theoil sands which account for about 5% ofCanadas overall emissions.18

Regional agreements such as theWestern Climate Initiative (WCI), theRegional Greenhouse Gas Initiative(RGGI), the Midwest Greenhouse GasAccord (Midwest Accord) seem to befurther along in establishing GHGemissions targets but function within avoluntary framework. The WCI,comprising US states (Arizona, California,

New Mexico, Oregon, Washington,Montana and Utah) and Canadianprovinces (British Columbia, Manitoba,Ontario, and Quebec), aims to implement

a cap-and-trade program that will reducegreenhouse gas emissions by 15% from2005 levels by 2020 and when fullyimplemented in 2015, will cover nearly90% of the GHG emissions in WCI statesand provinces.19

The Regional Greenhouse Gas Initiative(RGGI) is a cooperative effort by tenNortheast and Mid-Atlantic states toreduce CO2 emissions from the powersector by 10% by 2018 using market-

based cap and trade.

20

The MidwesternAccord covers six US states (Illinois,Iowa, Kansas, Michigan, Minnesota, andWisconsin) and one Canadian province(Manitoba). Another three US states andone Canadian province are formallyobserving the process. The MidwesternAccord is currently consideringrecommendations for a regional cap andtrade program, scheduled to launch inJanuary 2012.21

Further to this, several US states and

Canadian provinces have set individualGHG emissions targets. For exampleCalifornias Global Warming Solutions Actmandates implementation of aneconomy-wide cap-and-trade system andother regulations by 2012 in order tomeet 2020 GHG emissions reductiontargets.

International agreement on addressingclimate change post-Kyoto will be soughtat the UN Climate Change Conference in

December 2009 where the two countrieswill have an opportunity to show theirlevel of commitment to addressingclimate change at the international level.On 10 August 2009, the North AmericanLeaders Declaration on Climate Changeand Clean Energy was issued at aconference of the leaders of US, Canadaand Mexico. The declarationacknowledges the scientific evidence onclimate change and supports reducingglobal emissions by at least 50% by 2050

compared to 1990 or a more recent year,with developed countries reducingemissions by at least 80% by 2050compared to 1990 or a more recent


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year.22 Except for the US, mostdeveloped countries have agreed totargets for cutting emissions by 2020.23

The US has indicated it will not requiredeveloping countries to commit tobinding reductions but rather will requiretheir actions towards the reduction goalsto be binding.24 However, these andother points of contention will need to besorted out decisively in Copenhagen.Other key areas of dispute includedemands for tougher targets for richcountries, legally binding reductioncommitments from emerging economiesand poor countries asking for financial

assistance from rich countries if they arerequired to quantify their emissionreduction actions.25

Scope of Analysis

This analysis uses EIRIS assessment of theimpact and response of companies in theFTSE All World Developed Index. (The termglobal in this report comprises the FTSE AllWorld Developed Index.) Focusing on theNorth American countries (Canada and US)

within the index, the report covers 660 NorthAmerican companies consisting of 608 USand 52 Canadian companies, representingUSD 9.8 trillion and USD 807 billionrespectively. The analysis comparesresponses of very high or high impact NorthAmerican companies to their global peers.Throughout this report, unless otherwisespecified, all percentages representproportion of market cap.Key findings are highlighted below.

1) Climate change profile of NorthAmerican companies at similar level toglobal peers

EIRIS classifies companies into over 50sectors (and sub-sectors) based on businessactivities. Each sector is defined as havingvery high, high, medium or low climatechange impact based on its direct emissions(i.e. operational) and indirect emissionswhere companies have control, not justinfluence (i.e. supply chain).

Examples of very high impact sectors includeoil and gas or electricity generation. These

sectors have average carbon intensity(relative to turnover) 125 times that of thelow impact sectors. High impact sectors,such as food producers, are on average five

times as carbon intensive. Medium impactsectors, such as consumer electronics, arethree times as carbon intensive. EIRIS usescompany data and independent sources toassess carbon intensity.

Figure 2 shows that about a third ofcompanies in the FTSE All World DevelopedIndex (32%) as well as in the NorthAmerican subset (US and Canada) (27%) areclassified as very high or high impact forclimate change. The percentages represent,USD 6.8 trillion and USD 2.9 trillion marketcap respectively, as of August 2009.

Based on market cap, 43% of Canadiancompanies compared to 26% of UScompanies have a very high or high climatechange impact. In absolute numbers thepercentages represent market cap of USD351 billion for Canada and USD 2.5 trillionfor the US. In terms of the number ofcompanies, the US has 143 very high or highimpact companies compared with Canada's

22 companies. Hence, while there is a lessermarket cap proportion of very high or highimpact US companies compared to Canada,the actual number and market cap of UScompanies in this category is greater thanCanadian companies. Additionally, UScompanies are more evenly distributedamong very high, high and medium impactswith 19% of US companies medium impactcompared to 4% of Canadian companies.

North America16%

11%

18%

55%

Global

18%

14%

17%

51%

Fig. 2 Climate change impact by % market cap


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Fig. 3 Climate change impact of Nor thAmerican companies by % market cap

0% 20% 40% 60% 80% 100%

Canada

US

Very high High Medium Low

This analysis evaluates the responses ofcompanies assessed as having very high orhigh climate change impact based on EIRISresearch. It compares all such companies inthe FTSE All World Developed Index to NorthAmerican companies in the index.

2) Overall, the climate change responseof North American companies iscomparable to global peers

With input from investor groups, NGOs andcompanies (including World Wide Fund for

Nature, Climate Group, Carbon Trust andInstitutional Investors Group on ClimateChange), EIRIS has developed indicators toassess how companies should best addresstheir climate change impacts and risks.EIRIS indicators cover aspects such as:

Governance e.g. does thecompany have a corporate-wideclimate change policy, or is boardremuneration linked to climatechange performance?

Strategy e.g. has the company settargets?

Disclosure e.g. does the companyreport GHG emissions, quantifieddisclosure risks or opportunities?

Performance e.g. does thecompany demonstrate a year on yearreduction in GHG emissions, ortransformational initiatives such aslarge scale investment in carboncapture and storage?

These indicators are aggregated into fiveassessment grades, from no evidence toadvanced, where good (the second highestgrade) is considered the level at which

companies are adequately responding to theissue of climate change.

North American companies are performing

almost at the level of their global peers intheir overall response to climate change.About one fifth of North American companies(19%) have a good response (global: 23%);50% have an intermediate response (global:54%); and 9% have a response ofnoevidence (global: 7%).

Electricity generation (44%) and food

producer companies (19%) comprise about63% of the total number of North Americancompanies rated as good and oil and gas(22%), residential building (11%), foodproducers (11%) and electricity generation(9%) comprise about 53% of North Americancompanies with no evidence responses.

Figure 5 shows individual performances withUS companies (21%) leading Canadiancompanies (8%) in achieving a goodresponse but less than 1% of Canadiancompanies having a response ofno evidencecompared to 10% of US companies.

The comparable performance of NorthAmerican companies to that of global peerscould be due to various factors includingpending or existing mandatory emissionstargets, pressure from the investorcommunity and extent of companies globaloperations.

Fig. 5 Climate change response of North

American companies by % market cap

(very high & high impact)

0% 20% 40% 60% 80% 100%

Canada

US

Advanced Good Intermediate Limited No evidence

Global0%

23%

53%

17%

7%

North America

0%

19%

50%

22%

9%

Fig. 4 Climate change response of Global and

North American companies by % market cap(very high & high impact)

Advanced Good Intermediate Limited No evidence


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3) North American companies lagbehind substantively in certain areas ofresponse

An examination of the specific elements thatcomprise the climate change response showsthat North American companies are generallyperforming close to but not at the level ofglobal peers with a greater gap in someareas than in others.

North American companies lag behind inlinking board or senior managementremuneration to GHG emissions reductions,with 16% of companies having acommitment to this compared with 28% ofcompanies at the global level.

Closer to global levels, 91% of NorthAmerican companies have a corporate-wideclimate change policy (global: 93%) and64% reference the wider policy context byreferring to international targets, regulationsor scientific imperative (global: 68%). BothCanadian and US companies show a strongcommitment to climate change policy with90% of US companies and nearly 100% ofCanadian companies meeting this indicator.

Fig. 6 Governance performance by % market

cap (very high & high impact)

0% 20% 40% 60% 80% 100%

Global

North America

Global

North America

Global

North America

Y es N o

Fig. 7 P olicy committment of NorthAmerican companies by % market cap

(v ery high & high impact)

0% 20% 40% 60% 80% 100%

Canada

US

Yes N o

North American companies fall behind globalpeers only slightly in climate change strategyas determined by commitment to short-term(less than five years) and long-term (at least

five years) GHG emissions reduction targets.Of North American companies 57% committo short-term targets (global: 62%) while23% of North American companies committo long-term targets (global: 31%). The lackof long-term targets may be due to absenceof a clear policy framework. Leading theCanadian companies, 58% and 24% of UScompanies have set short-term targets andlong-term targets respectively, compared to44% and 16% of Canadian companies.

Fig. 8 Strategy performance by % market cap(very high & high impact)

0% 20% 40% 60% 80% 100%

Global

North America

Global

North America

Yes N o

EIRIS defines certain sectors as havingsubstantial impact on climate changethrough their products. 45% of global veryhigh or high impact companies and 46% ofNorth American very high or high impactcompanies are in sectors classified as havinga high product impact in relation to climatechange. These companies are evaluated forproduct-related climate change policy andtargets.

An assessment of very high or high impactcompanies classified by EIRIS as havingproduct impact shows that North Americancompanies lag behind global companies inhaving a product-related climate changepolicy as well as committing to targets, witha bigger gap to cover in the former area.

A little over two fifths of North Americanproduct impact companies (43%) havepolicies that commit to address the climate

change impact of their products (global:71%). Only 9% of North American productimpact companies have set targets to reducethe climate change impact of products


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(global: 19%). Notably, this figure includesno Canadian companies.

Fig. 9 Product performance by % market cap ofcompanies (very high & high impact)

0% 20% 40% 60% 80% 100%

Global

North America

Global

North America

Yes No

4) Overall disclosure on climate changeby North American companies is ofpoorer quality than global peers

In terms of disclosure, companies withadvanced or good disclosure account for50% of the market cap at the global leveland 37% for North American companies.Electricity generation (35%), specialty

chemical companies (16%) and foodproducers (14%) comprise 65% of the NorthAmerican companies rated as good. Oil andgas (27%), food producers (13%) andelectricity generation (11%) comprise 51%of the North American companies rated as noevidence.

5) North American companies lagbehind notably in certain areas ofdisclosure

The quality of disclosure includes

consideration of reporting absolute ornormalized GHG or CO2 emissions, theavailability of trend data and the disclosureof the scope of data.

North American companies are furtherbehind than global peers in having dataverified externally with 35% meeting thisindicator compared to 51% at the globallevel.

However, North American companies lag

only slightly behind global peers in reportingabsolute emissions. About four-fifths ofNorth American companies (80%) report

absolute emissions (global: 84%) and 73%report normalized emissions (global: 77%).

Of North American companies, 72% disclose

scope of data (global: 81%) and 28%provide a quantitative assessment of riskand/or opportunities from climate change(global: 30%).

Fig. 10 GHG emissions disclosure companies by %market cap (very high & high impact)

0% 20% 40% 60% 80% 100%

Global

North America

Global

North America

Yes No

Fig. 11 Disclosure quality by % market cap of(very high & high impact)

0% 20% 40% 60% 80% 100%

Global

North America

Global

North America

Global

North America

Yes No

Canadian companies lead in disclosing scope

of data with 95% disclosing (US: 69%) andalso slightly outperform in reporting absoluteor normalised emissions with 96% reporting(US: 79%). The US leads slightly in riskdisclosure with about one third of UScompanies (29%) meeting this indicator(Canada:21%).


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Fig. 12 Absolute or normalised emissions

of North American companies by %

market cap (very high & high impact)

0% 20% 40% 60% 80% 100%

Canada

US

Yes No

Fig. 13 Scope disclosure of North

American companies - GHG emissions

data by % market cap (very high & high

impact)

0% 20% 40% 60% 80% 100%

Canada

US

Yes No

Fig. 14 Risk disclosure of North American

companies - GHG emissions data by %

market cap (very high & high impact)

0% 20% 40% 60% 80% 100%

Canada

US

Yes No

Conclusions

North American companies are performingalmost at the level of their global peers inresponding to climate change, in areas suchas establishing policies with the appropriatecontext, reporting quantitative data, scope ofdata and quantitative risk disclosure.However, while the gaps are generally small,in no area evaluated are North Americancompanies outperforming their global peers.

1) Next steps for companies

In certain areas more than others, NorthAmerican companies will need to makegreater strides to meet global levels. This

includes implementing product-relatedpolicies and targets (gaps of, 28% and 10%respectively); externally verifying reporteddata (gap of 16%); reporting against

reduction targets (gap of 13%); and linkingremuneration to climate change (gap of12%).

Within the North American region there aresome differences in the overall response toclimate change. With a gap of 13%, UScompanies perform better in providing goodoverall responses to addressing climatechange. However, 9% more US companiesthan Canadian companies provide noevidence of an adequate response. In the

area of disclosure, US companies have gapsof 26% and 16% to cover in disclosing scopeof climate change data and reportingemissions respectively compared toCanadian companies. US companies dooutperform Canadian companies in the areaof setting climate change product impacttargets.

In general, Canadian and US companies facesimilar challenges to adequately addressingthe issue of climate change as their globalpeers. Various forces can drive the actions of

companies in this region. The change in USleadership is resulting in a more proactiveand positive policy stance on climate change.This is likely to lead to the US committing tobinding GHG emissions reduction targets andthe creation of trading and othermechanisms that will have a direct impact oncompanies. Therefore, investors will need tofactor these into their valuation ofcompanies.

2) Further actions by investors

Additionally, the investor community hasmade strides in influencing how companiesare addressing climate change. Commentingon investor engagement with US andCanadian companies, CERES26 reported that68 climate-related shareholder resolutionswere filed in 2009 of which 31 werewithdrawn after the companies agreed topositive climate-related commitments; six ofthe 28 resolutions that went to a voteachieved 30% or greater support.27

In June 2009 members of the InvestorNetwork on Climate Risk (INCR) and otherleading global investors sent a letter to the


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US Securities and Exchange Commission(SEC) requesting that the Commissionaddresses corporate disclosure of climatechange and other material, environmental,

social, and governance risks in securitiesfilings.28

Further to this, a 2008 survey of a cross-section of 14 Social Investment Forum (SIF)members found that clean energy andtechnology investment demand was upamong clients.29

As national, regional and internationalinitiatives to regulate GHG emissions moveforward, companies will need to bettermanage their carbon risks and take firm

steps to be part of the transition to a low-carbon economy. Therefore investors need toincorporate analysis of the corporateresponse to climate change into themainstream financial assessments of thecompanies in which they invest.

Recommendations

1. Identify risk in your portfolio andintegrate carbon risk factors in yourcompany analysis

Understanding the carbon profile or footprintof your portfolio is an important first step,however for a complete picture of acompanys risk profile, investors should alsolook beyond emissions intensity to how thecompany is responding to the challenges ofclimate change. The profile of NorthAmerican companies in the FTSE All Worlddeveloped index is comparable to the globalaverage.

2. Include best practice companies in

your portfolioIncreasing the proportion of best practicecompanies in very high and high risk sectorsis a more practical measure against climatechange than divestment in these sectors.This creates an incentive for companies toenhance carbon management and disclosure.

3. Engage w ith laggard companies

Engagement with companies that have lessadvanced performance is essential. Thepossibility of climate change legislation in theUS poses a valuable opportunity to redirect

the climate change policies in suchcompanies and greatly contribute to the

mitigation of climate change risk on a globallevel.

__________________________

1. The Annex 1 countries include theindustrialized countries that were membersof the OECD (Organisation for Economic Co-operation and Development) in 1992, pluscountries with economies in transition (theEIT Parties), including the RussianFederation, the Baltic States, and severalCentral and Eastern European States.http://maps.unfccc.int/di/map/

2.`Laggard' Canada's greenhouse emissions

soaring: UNreport, Margaret Munro, 20 April2009, Canwest News Service

3. United Nations Framework Convention onClimate Change Total CO2 EquivalentEmissions with Land Use, Land-Use Changeand Forestry,http://unfccc.int/ghg_data/ghg_data_unfccc/time_series_annex_i/items/3814.php

4. Greenhouse gas emission,http://www.msnbc.msn.com/id/28039737/

5. Carbon Disclosure Project 2009 Global 500Report

6. International Energy Agency,http://www.iea.org/Textbase/stats/index.asp

7. Climate Change Tracker: Asia,http://www.eiris.org/files/research%20publications/ClimatechangetrackerAsia09.pdf

8. At a Glance: American Clean Energy andSecurity Act of 2009,

http://www.pewclimate.org/docUploads/Waxman-Markey-short-summary-revised-June26.pdf

9. Summary of the Clean Energy Jobs andAmerican Power Act - S. 1733,http://www.pewclimate.org/short-summary/clean-energy-jobs-american-power-act

10. Senate climate bill halves offsets,http://www.carbonpositive.net/viewarticle.as

px?articleID=1682


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11. Proposed Mandatory Greenhouse GasReporting Rule,http://www.epa.gov/climatechange/emissions/ghgrulemaking.html

12. Summary of the American Recovery andReinvestment Act (ARRA),http://www.pewclimate.org/analysis/ARRA

13. Bill C-288,http://www2.parl.gc.ca/HousePublications/Publication.aspx?pub=bill&doc=C-288&parl=39&ses=1&language=E&File=33

14. Federal Court Rules Canada Not ObligedTo Meet Kyoto Targets, 13 November 2008,

Mondaq Business Briefing

15. North America Climate Change Action byState and Province,http://www.iie.com/publications/papers/fickling0811.pdf

16. Greenhouse gas enforcement could take6 years: Prentice,http://www.cbc.ca/canada/story/2009/05/28

/prentice-greenhouse.html

17. Environment (A Special Report) --- SandStorm: The U.S. government is changing itsenvironmental policy; Now Canada may haveto rethink its policy as well, Hyun Young Lee,9 March 2009, The Wall Street Journal

18. Environment (A Special Report) --- SandStorm: The U.S. government is changing itsenvironmental policy; Now Canada may haveto rethink its policy as well, Hyun Young Lee,9 March 2009, The Wall Street Journal

19. Western Climate Initiative,

http://www.westernclimateinitiative.org/the-wci-cap-and-trade-program/faq#question5

20. Regional Greenhouse Gas Initiative,http://www.rggi.org/about

21. World Resource Institute Fact Sheet:Regional Cap and Trade Programs,http://pdf.wri.org/factsheets/factsheet_regional_cap_and_trade.pdf

22. North American Leaders Declaration on

Climate Change and Clean Energy,http://www.whitehouse.gov/the_press_office

/North-American-Leaders-Declaration-on-Climate-Change-and-Clean-Energy/

23. Concession raises hopes for climate deal,

http://www.ft.com/cms/s/0/45450bde-bcd5-11de-a7ec-00144feab49a.html

24. US eases pressure on China over climatechange targets,http://www.guardian.co.uk/environment/2009/jun/12/us-eases-climate-pressure-china

25. Concession raises hopes for climate deal,http:/ / ww w.ft.com/ cms/ s/ 0/ 45450bde

-bcd5-11de-a7ec-00144feab49a.html

26. CERES is a network of investors,environmental organizations and other publicinterest groups working with companies andinvestors to address sustainability challengessuch as global climate change.

27. Investors Achieve Major CompanyCommitments on Climate Change,http://www.ceres.org/Page.aspx?pid=1121

28. Investors With $1.4 Trillion in Assets Callon the SEC to Improve Disclosure of ClimateChange and Other Risks,

http://www.incr.com/Page.aspx?pid=1107

29. SIF is a US membership association forsocially and environmentally responsibleinvestment professionals and institutions,Social Investment Forum Survey Finds 100Percent of Respondents Report GrowingDemand; 10 or More New CleanEnergy/Green Technology MutualFunds/Other Investments Expected,http://www.socialinvest.org/news/releases/pressrelease.cfm?id=120


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About EIRIS (w ww .eiris.org)

EIRIS is a leading global provider of independent research into the environmental, social, and governance, (ESG), andethical performance of companies. With over 25 years experience of conducting research and promoting responsibleinvestment strategies, EIRIS now provides services to more than 100 asset owners and asset managers globally. In thelast ten years new EIRIS research has focussed on the risks and exposure of companies in key ESG areas, and howcompanies are responding. EIRIS works with clients to create their own ESG ratings and rankings, to engage withcompanies and to create specific funds for their clients. EIRIS has a multinational team of over 50 staff in London,

together with offices in Boston and Paris. The EIRIS network includes research organisations in Australia, France, Israel,Germany, Spain and South Korea, and now covers around 3,000 companies globally.

Author: Aisha Husainwith thanks to Stephen Hine, Stephanie Maier and Carlota Garcia-Manas.

Contact us: 020 7840 5700 or [email protected]

Funded by the EI RIS Foundation (w ww .eirisfoundation.org)

This briefing has been made possible by a grant from the EIRIS Foundation, registered charity number 1020068. TheEIRIS Foundation is a charity that supports and encourages responsible investment. It promotes research into the socialand ethical aspects of companies and provides other charities with information and advice to enable them to chooseinvestments which do not conflict with their objectives. The Foundation funds specific projects to achieve these aims.

EIRIS

How we can help EIRIS Climate Change Toolkit for InvestorsEIRIS has developed a comprehensive suite of products to help investors assess their portfoliosand design investment strategies in response to the challenge of a carbon-constrainedeconomy.

EIRIS Carbon Profile - assesses the climate change performance of a portfolio againstmajor market indices by considering both climate change impact and company responses.It is designed to help investors understand the quantitative climate change impact of theirportfolios. It provides a qualitative assessment of company responses to climate change.

EIRIS Carbon Engager helps investors to target their engagement on climate changeand identify key priorities. It provides detailed reports on individual company performanceand best practice examples to support a variety of engagement approaches.

EIRIS Carbon Risk Factor - quantifies individual company performance on climate change.It provides a risk-weighted score based on each companys carbon impact andmanagement response to climate change. It is designed to be easily integrated intoanalysts models.

For further information contact Lisa Hayles: [email protected] 7840 5727 (direct line)

Climate Change Tracker North America Oct 09

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