Climate Change

Climate change, also referred to as global warming, is the concept that human activity is causing a gradual rise in global temperatures, potentially causing changes in weather patterns that may cause severe disruptions to human society.

In September 2007, an advocacy group known as the Carbon Disclosure Project (CDP) released the results of a survey indicating that approximately 80% of U.S. companies believe that climate change poses commercial risks for their businesses. However, few companies have attempted to quantify these risks. Investors are encouraging more environmental disclosure from companies because environmental issues can affect profits. Corporate market values can be hurt by litigation and regulation related to carbon emissions. The effects of climate change can be especially significant for companies whose profits are sensitive to weather and to energy prices. In April 2007, the Supreme Court ruled that greenhouse gases are a pollutant that may be regulated by the Environmental Protection Agency. In September 2007, President Bush asserted that the U.S. "must lead the world to produce fewer greenhouse gas emissions." In late September 2007, the activist organization, Environmental Defense, joined 22 institutional investors in the U.S. and Europe and petitioned the Securities and Exchange Commission (SEC) to issue environmental-disclosure guidance to public companies.

Due to the current lack of disclosure and the potential cost of climate change proposals that require greenhouse gas reduction or control implementation, LAFPP supports shareholder proposals that request company management to report on climate change issues such as emissions, regulations and reduction.