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Investor Group Pushes Automakers for Action on Climate Change

20 May 2006

California State Controller Steve Westly and the Investor Network on Climate Risk called on the world’s largest automakers to address their role in global climate change and the effects it could have on their profits.

On Friday, the investor group—which manages more than $465 billion in invested assets—sent letters to Toyota, Honda, DaimlerChrysler, Volkswagen, BMW, Nissan, and General Motors pushing for an increase in environmentally sound practices and resulting performance for shareholders.

A similar effort in 2004 resulted in action by Ford. Current dialogue between General Motors and investors shows promise of similar positive results, according to Westly’s office.

Ford has taken the lead with its Climate Risk Disclosure Report. We expect the other companies we invest in to do the same. Taking action will give investors confidence that auto manufacturers are prepared to operate in a carbon constrained economy. Protecting the environment is good for California and good for business.

—Steve Westly

The letter outlined six factors that should impel automakers to shift production to cars that are more fuel-efficient, burn clean fuels, and emit less pollution:

  • Volatile gas prices. High and volatile gas prices as a result of Hurricane Katrina coupled with limited supply and rapidly rising world-wide demand.

  • Energy Security. Dramatic revisions to both the International Energy Agency’s and the Energy Information Administration’s oil price forecasts, predicting rising oil prices and increasing dependence on five or six middle eastern countries.

  • Energy Independence. New energy independence measures, including enactment of the 2005 US Energy Bill, to accelerate introduction of fuel-efficient technologies and biofuels.

  • New Regulations. New policies globally ensure that the world’s major auto markets are covered by carbon or fuel economy standards. In the US, 11 states have adopted or are close to adopting tailpipe emission standards that would affect 33% of passenger vehicles sold in the US

  • Alternative Technologies. The clear emergence of hybrids as an important mid-term auto technology to produce cleaner, more fuel-efficient vehicles.

  • New Fuels. The emergence of biofuels as the alternative fuel of choice.

Signing the letter were Westly; the Adrian Dominican Sisters; Phil Angelides, Treasurer, State of California; California Public Employees’ Retirement System; California State Teachers’ Retirement System; Denise Nappier, Treasurer, State of Connecticut; Jeb Spaulding, Treasurer, State of Vermont; William C. Thompson, Jr., Comptroller, City of New York; and the Tri-State Coalition for Responsible Investment.

A growing number of companies and investors are recognizing the financial risks and opportunities of climate change, and these are especially relevant to the auto sector. It’s important that automakers disclose the implications of climate change for their business, and we look forward to collaborating with them on this issue.

—Mindy S. Lubber, president of Ceres and director of the Investor Network on Climate Risk

The day before, Westly and the INCR made a similar call on ExxonMobil.

While the state of California and other oil companies are moving ahead to reduce the risks of climate change, ExxonMobil is stubbornly refusing to meet with shareholders. We demand a meeting with ExxonMobil’s board of directors to map out a new direction for the company. Exxon Mobil must limit the risks of climate change and ensure the company is positioned to capture opportunities in alternative energy technologies.

—Steve Westly

May 20, 2006 in Climate Change, Fuel Efficiency | Permalink | Comments (14) | TrackBack (0)

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Thank you! At last it looks like something is happening to counteract Climate Change. Yahoo! had headline today regarding www.greencarcongress.com. Thank you Yahoo! also! Get the word out that there are alternative ways to stop use of fossel fuels.

I have placed your link on my site: http://www.dataoptions.com/political/informed.htm#ClimateChange .

Cheers,

Aimee L. Walker
Friday Harbor, WA

Why did they left out Ford?
Aren't Ford cars, [one of the] top gross polluters in the world?


FS

Okay, I read it through...
So, Ford was engaged in 2004... but I still do not believe any of these car makers, especially GM, Ford and DC!

Just go to:

http://www.sonyclassics.com/whokilledtheelectriccar/electric.html

...and see for yourself!

FS

Election Day coming up. Politicians posturing. Yawn.

Global warming?
To paraphrase the title of a new movie, it an Inconvenient Truth.
Except for a few drowning polar bears, how Inconvenienced we will really be?
The world is always changing: Mud slides, earthquakes, storms.
We should expect change.
Change re-invigorates human beings.

As far as crying over the smashing of electric cars,
It was a business decision. Period.(no matter, how evil, that may appear to some people)
We need to move on.
People wanted bigger, louder SUVs. period.

RULE: Business determines the course of our Government.

Corporations are global; they have NO allegiance to any Nation- just the worldwide group of stockholders.
Get your own business and you will then see what a jungle we live in.
Dealing with ungrateful employees, meeting payroll, getting fined for not meeting a new regulation.
If you do not have the stomach for it, at least buy stock. You can then get a trickle of the profits and share that little feeling of greed and class superiority.


Change invigorates humans?
Yeah what the heck you know little things like drought and famine shouldn't worry your children and grandchildren. A rising sea level that will swamp the coasts and force populations to move inland and use up precious arable land and water.What about making the world a better place. Your change is change for the worse. My change is change for the better. I am reminded sometimes about the parallels with alcoholics. "I don't have a problem", "There is no problem" etc. When one is mature enough to admit there is a problem they stop, pick themselves up and start doing something about making life positive. That's what these stockholders are forcing these companies to do.

According to the scientists, no matter what we do, Warming will come.
Fossils fuels will be sucked out of the ground and the ocean bottom until deleted. The great energy corporations have already paid for the mineral/mining rights. CEOs will not allow extraction to stop. With the RISING cost of energy, it will NOT stay in the ground.

If one is super keen on reducing planet change, the goal is: To keep fossil fuels IN THE GROUND!
1) This will solve the energy problem(uh? keeping it in the ground?)
2) reduce CO2 emissions
3) Create World peace

To keep fossil fuel buried,
THE COST OF ENERGY MUST DECREASE.
This is the challenge of our generation.

This can be done will massive government programs for locally generated electricity. Wind, tidal, solar.
With cheaper energy, this will create a regional ecomonic advantage, because electricity cannot be sold and shipped half way across the world. Thus, Not forcing the local price of energy to increase.

But, for the reasons listed in my previous post, this will not happen, so just relax, buy stock and turn up the air conditioning a little.
Why worry about things we have no control over.
Most people don't freak out with the thought of their natural death. Fear of global warming should be less than natural death.

Tony, you're nutty, but have most of it right. Thing you got wrong is about the impact we can have on global warming. See, it is happening and will continue to happen, that is out of our control. How bad and for how long is completely in our control.

The ozone hole is a perfect example. Yesterday a study was released that the hole should close by 2050. Right now it is at its biggest, but due to the controls on CFCs and they're steep decline in the atmosphere, the hole should be closed in our lifetimes. Those controls were relatively sudden and draconian, yet resulted in the greatest impact on the problem.

No reason to think that sudden and draconian action on our part today won't mitigate the impact and longevity of global warming.

Think of it this way: the last generation had to keep the Soviets at bay. The current generation has to shake its addiction to foreign crude oil, because with it come war, terrorism and climate change. Our children deserve to be free from these threats.

Therefore, instead of sending carmakers sanctimonious letters exhorting them to do better, politicians should demonstrate some genuine leadership by commiting to a firm policy: *raise* taxes on transportation fuels from non-renewable sources (e.g. natural gas, gasoline, diesel, kerosene) by $0.02 each and every month for a full decade! By the end of 2016, prices at US pumps *should* approach European levels. To compensate, the pols should simultaneously raise the standard fixed-value tax credits that are available to all. I am *not* advocating higher taxes, merely a lateral shift in the tax base.

Providing a long-term outlook of gradually rising gas prices will shift both demand and supply in the desired direction. It will incent consumers to make rational transportation choices, above all when they next purchase a vehicle. This, more than anything, will drive carmakers to develop IP related to fuel economy and reposition their brands as they take advantage of it.

You can argue that is happening right now anyhow, without any need for changes to the tax structure. The problem is that the present trend has to be sustained for a decade while the vehicle fleet churns. Oil prices may well come down again long before then.

With consistently high fuel prices, costly wars to secure access to foreign oil fields should become unneccessary as domestically produced biogenic and/or synthetic fuels get a chance to compete in the market, without any need for subsidies. As a fringe benefit, average net CO2 emissions per mile traveled may well go down, even without a successor to Kyoto.

Well said. Again, sudden and relatively draconian measures are what we need. Problem is, nobody in office is going to throw their career away advocating things like this. So until the American public demands it (you and me), it ain't gonna happen. I disagree that oil prices are going to drop. I am of the opinion that we definitely hit peak oil last year, and world demand is only rising. Add to that more active storm seasons, more dedicated terrorists attempting to strike the oil infrastructure, Iran, and general mid-east/Latin America political instability.

CFC is only one chemical, and once a substitute was found, there was less resistance to switch, especially if more profit could be selling the new product.
However, "Fossil fuels"(FF) is what powers out modern economy and is part of our culture; so much so that some Americans would rather be found dead from the effects of poor syphining technique(stealing gas) than drive a wimpy electric car.
These powerful consumer and corporate forces wil suck out all FF in the ground and the ocean bottom until deleted.
All we can do is to Pray for a continous supply of cheap enough oil.

WE CANNOT STOP STOP THE USE OF FF. Heck If the Europeans and the Candians cannot meet their CO2 goals, do you think Americans can? Americans so love big cars, politicans are even afraid to rise the CAFE standards!

So releax, chill out, let warming AND the economic forces causing global warming play out.
Besides, evolution will provide a better swimming polar bear.

Tony -

evolution takes millions of years to adapt to climate changes on the scale some researchers are forecasting now. It is true that if the polar bear were to become extinct, some other animal would eventually fill the niche it left behind. However, I'd prefer to see it live in the Arctic - the collapse of the thermohaline Gulf Stream convection due to melting glaciers in Greenland would turn the Western European thermostat way down for thousands of years.

Btw, Europeans have actually managed e.g. a 15% drop in CO2 production per km traveled by car since 1995. Arguing that just because we have not succeeded in meeting all of our lofty goals is hardly an excuse for Americans to do nothing at all!

I once saw a TV program of a geologist in the field.
He was examining an open section of strata. He was pointing to the various lines in the strata and how they equated to the various "ages" of the Earth.
The geologist mused that if space aliens examined it millions of years from now, the age of humans would be represented by one, thin, black line.

My point is warming has gone to far and humans beings don't want their "lifestyle" affected. So Earth is doomed to whatever fate Warming will deal us.
With Hollywood pumping out its share of disaster films, it is a shame Washington is not leading. It would have been a powerful 1-2 punch in knocking out global warming.

According to the scientists
Never trust anybody who claims that science or scientists speak with a single, not-conflicting voice. Hardly any better than claiming to speak for or to God.

...no matter what we do...
OK. We're all dead. Shut up, go away and stop bothering us. At least allow us to die in peace.

Warming will come.
Not so long ago it was: The End is coming. This does not sound nearly as bad.

Fossils fuels will be sucked out of the ground and the ocean bottom until deleted(sic).
Correction: Fossils fuels will be sucked out of the ground and the ocean bottom until unaffordable.

The great energy corporations have already paid for the mineral/mining rights. CEOs will not allow extraction to stop. With the RISING cost of energy, it will NOT stay in the ground.
Your point? Next: Science discovers water is wet!

If one is super keen on reducing planet change, the goal is: To keep fossil fuels IN THE GROUND!
1) This will solve the energy problem(uh? keeping it in the ground?)
2) reduce CO2 emissions
3) Create World peace

Why stop there? How about:
4) End poverty
5) Cure desease
6) Make every wish come true

To keep fossil fuel buried,
THE COST OF ENERGY MUST DECREASE.
This is the challenge of our generation.

I am affraid it's worse than that. To keep fossil fuel buried, would require life, as we know it, to end. So be careful what you wish for...

This can be done will(sic) massive government programs for locally generated electricity. Wind, tidal, solar.
Massive government is part of the problem. While government probably has a role to play in solutions, a smaller government would probably help the most. No more subsidies to farmers, oil companies and auto makers. We don't have enough money to go defend ourselves in the Middle East. What a crisis! The CIA don't have money to support Saddam, Osama, the latest enemy-of-our-enemy (soon to be our enemy).

With cheaper energy, this will create a regional ecomonic advantage, because electricity cannot be sold and shipped half way across the world. Thus, Not forcing the local price of energy to increase.
No need for any comments. That paragraph is entertaining enough on its own...

But, for the reasons listed in my previous post, this will not happen, so just relax, buy stock and turn up the air conditioning a little.
More like, for reasons of Economics 101. Turn up the air conditioner, if you can afford.

Why worry about things we have no control over.
Always good advice.

Most people don't freak out with the thought of their natural death. Fear of global warming should be less than natural death.
Fear usually do not help anybody to make a decision that's any good. Why would fear of global warming be any different?

Thanks, Tony. What would life be without comic relief?

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