Companies not responding to climate change

I was intrigued to read an article last week describing how a coalition of institutional investors and public interest groups in the US are pressuring nine companies to develop and disclose how they are responding to climate change.

The nine have been identified as lagging behind what the group consider to be appropriate reporting on the business challenges and are failing to engage effectively with shareholders on the issue.

I predict we will see many more pressure groups put companies on their ‘climate watch’ lists, as it becomes increasingly obvious that poor environmental practice has the potential to seriously impact on share prices.

ExxonMobil, Chevron and General Motors are three of the nine companies.

The group sentiment is that companies’ lack of climate risk disclosure is as great a risk as that of the subprime crisis.

I guess it is inevitable that a company’s environmental initiatives, overall strategy and ability to keep shareholders informed of these have come under increasing scrutiny in recent years. These however face the prospect of being derailed by focus on the continuing mayhem in the financial markets. The prospects of a significant global deal on climate change looks increasingly unlikely. Sadly good environmental practice is initiated from wealth rather than from poverty. And a climate deal is all about imposing substantial costs.

I can’t help wondering how Chinese investors feel about the one new coal-fired power station that gets commissioned every week?

Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Sydney Australia and joint founder of BrandSynergy in Singapore.

View some of Heywood’s work on www.heywood.com.au

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