Bloomberg News

Investors Worth $10 Trillion Say Carbon May Hinder Profits

February 21, 2012

(Updates with Ilmarinen comment in sixth paragraph.)

Feb. 20 (Bloomberg) -- Investors with about $10 trillion under management, including Banco Santander SA, Henderson Group Plc and Axa SA, urged companies to cut carbon-dioxide emissions to protect themselves against future climate policies.

The Carbon Disclosure Project wrote to 415 of the world’s biggest carbon-dioxide polluters on behalf of 92 banks, asset managers, pension and insurance funds, according to an e-mailed statement from the not-for-profit project in London.

“The external costs of greenhouse gas emissions will become internalized into company cash flows and profitability, Paul Abberley, chief executive officer at Aviva Investors in London said in the statement today. ‘‘Managing greenhouse gas emissions is therefore essential to delivering sustainable shareholder returns.’’

Utilities, manufacturers, transport companies, retailers and communications firms are among businesses that were sent letters, the project said, while declining to name the companies targeted.

Banks and funds are increasingly seeking information on the environmental policies of companies they invest in. Investors who ignore the cost of emitting carbon are at risk of making a mistake akin to those who invested in subprime mortgages, former U.S. Vice President Al Gore said on Feb. 16. The Bank of England said on Feb. 7 it will evaluate whether U.K. investments in emitting industries pose a risk to financial stability.

‘‘For investors it’s important to identify companies that can manage carbon risk and turn it into a competitive advantage rather than those that just use greenwash,’’ Anna Hyrske, head of responsible investments for Ilmarinen Mutual Pension Insurance Co., said by telephone from Helsinki.

--With assistance from Alex Morales and Simon Clark in London. Editors: Matthew Brown, Alessandro Vitelli

To contact the reporter on this story: Catherine Airlie in London at cairlie@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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