Institutional Investors Look to Strengthen Climate Policies at This Year’s United Nations Climate Conference
On Your Behalf—September 2009
In December, the United Nations Framework Convention on Climate Change (UNFCCC) will be meeting in Copenhagen for its annual conference. This year’s conference is especially important, as delegates will be considering ways to expand and extend the provisions of the Kyoto Protocol, an adjunct to the UNFCCC, which expires in 2012.
With 192 signatories, the UNFCCC represents almost every country of the world. It was one of three international treaties that grew out of the 1992 United Nations Conference on Environment and Development held in Rio de Janeiro. The goal of the UNFCCC is to stabilize greenhouse gas emissions “at a level that would prevent dangerous anthropogenic (human induced) interference with the climate system.” Nation signatories are expected to develop programs that slow or eliminate climate change attributable to greenhouse gas emissions.
In 1997, the UNFCCC was supplemented by the Kyoto Protocol, a binding treaty setting targeted goals for greenhouse gas emission reductions. The Kyoto Protocol has been signed by 184 countries and commits a number of industrialized nations to reducing greenhouse gas emissions by an average of 5% percent compared with 1990 levels during 2008 to 2012.
The existing Kyoto Protocol expires in 2012. When UNFCCC and Kyoto Protocol signatories met in Bali in 2007, they agreed that by 2009 they would use the Copenhagen meeting to reach new and more aggressive post 2012 climate reduction goals.
The United Methodist Church Responds to Global Warming
In 2008, the General Conference of The United Methodist Church strengthened its position on global warming. In the Social Principles, a new section (D) of ¶160 was adopted, entitled “Global Climate Stewardship.” Recognizing the danger of increased greenhouse gas emissions, the new section ends with a firm declaration of support for “efforts of all governments to require mandatory reductions in greenhouse gas emissions.” In addition, the new section calls upon “individuals, congregations, businesses, industries, and communities to reduce their emissions.”
General Conference delegates also adopted Resolution 1031, Resolution on Global Warming. This resolution calls on all Church members “to reduce human-related outputs of greenhouse gases … to work to make their own congregations more aware of the issue of global warming and create policies and practices which reduce greenhouse gas emissions” and to “call on the nations of the world to require reductions in greenhouse emissions using the most efficient and cost-effective mechanisms.”
General Conference 2008 also directed several agencies of the Church (the General Board of Church and Society, the General Board of Global Ministries, the General Board of Discipleship, the General Council on Finance and Administration, the Connectional Table and the General Conference organizing body) “to work with Annual Conferences and United Methodist Camps and Retreat Centers to develop recommendations and resources that would guide The United Methodist Church in reducing our carbon dioxide impact.” The agencies are to report back to the 2012 General Conference. Their report is to include:
- a plan for evaluating the current status of contributions to global warming throughout the United Methodist connection by churches, institutions and staff;
- specific recommendations for reduction of contributions to global warming, such as solar panels or other renewable energies, meetings by conference call rather than driving, insulating buildings, etc.
- an ecumenical effort to support changes that would reduce global warming.
The General Board of Pension and Health Benefits on Climate Change
For many years, the General Board of Pension and Health Benefits (General Board) has encouraged companies, through dialogue and the filing of shareholder resolutions, to consider the impact of global warming on business operations and to consider ways to reduce the emission of harmful greenhouse gases into the atmosphere. This year, the General Board filed or co-filed five such resolutions. All together, investors filed nearly 70 climate change-related resolutions in 2009. One of these resolutions, filed with IDACORP, an Idaho-based electric utility, received more than 50% of the shareholder vote—the first climate change resolution to receive a majority of the shareholder vote.
Recognizing the significance of the upcoming UNFCCC conference in Copenhagen and the need to include climate change concerns in investment decision-making, the General Board has joined 181 global institutional investors, collectively managing more than $13 trillion in assets, in releasing a statement calling upon the UNFCCC to reach a strong global agreement on climate change strategies. According to the statement, “a strong global agreement will underpin investor confidence in the direction that regional and national climate policy will take and will support investors in their engagement with companies.”
Specifically, investors are calling upon the UNFCCC to, among other things:
- set a global emissions reduction target of 50 to 85% by the year 2050,
- create country-specific action plans that include measureable and verifiable emission reductions,
- seek government support for energy efficiency measures and the adoption of low carbon technologies,
- support the move toward an effective global carbon market with aggressive cap-and-trade schemes,
- reduce deforestation, and
- work to mitigate the effects of climate change that already have taken place.
The statement declares, “Clear, credible long-term policies are critical for investors to integrate climate change considerations into their decision-making processes and to support investment flows into a low-carbon economy and into measures for adaptation … The [Copenhagen] agreement must facilitate and encourage strong national action plans in order for us to help meet the climate challenge.”
The statement was publically announced on September 16 at the International Investor Forum on Climate Change in New York City. Besides the General Board, other signers include:
- Catholic Healthcare West,
- Central Finance Board of the Methodist Church (U.K.),
- Christian Brothers Investment Services,
- Church of England Pension Boards,
- Church of Sweden,
- Presbyterian Church (U.S.A.), and
- Unitarian Universalist Association.
The following five environment-related organizations also contributed to the statement:
The full text of the statement is available at: www.ceres.org/Page.aspx?pid=1126.
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