Investors instruct companies to disclose, manage climate risk

Environment News Service: Electric power company Constellation Energy reported reduced quarterly earnings of about $0.16 per share due to a record-setting 2011 heat wave in Texas that forced the utility to buy incremental power at peak prices. A new report released Thursday by Calvert Investments, Ceres and Oxfam America uses the Constellation Energy situation, among others, to illustrate why investors are advising companies to manage the physical risks posed by climate change.

The report finds that climate change already is causing a wide range of physical effects with "serious implications" for investors and businesses. These include: increases in storm intensity, sea-level rise, coastal erosion, thawing permafrost, floods, temperature extremes, wildfires, drought, water scarcity and decreased agricultural production.

Mindy Lubber, president of Ceres and director of the $10 trillion Investor Network on Climate Risk, said, "Virtually every sector faces climate risks and opportunities, and investors can't afford for those risks to remain opaque. The guidelines in this report shed light on how businesses should analyze and quantify physical risks from climate change so that investors can make informed decisions."

While weather variability and extremes have always existed, the science shows that extreme weather events are becoming more frequent and intense, that incremental climatic changes are already underway, and that the impacts of climate change are expected to grow more severe over the coming years and decades, the report states...

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