This was not intended to be a diary. I was just looking for a place to make a comment about the S&P report on global warming. Nothing was coming up that offered me a place to put the comment. So, I just decided to write a diary. Forgive me if it is not well developed and a bit meandering, but I really wasn't planning on writing a diary about this today.
On Thursday the S&P released a report of global warming. Starting as early as 2020 they will start rating countries on the investment risk attributed to global warming. Counties like Vietnam, Bangladesh, Senegal, Mozambique, Fiji, and the Philippines will be down graded because of the increased risk due to global warming.
They are the biggest player to come out and admit global warm is not only real, but inevitable. Despite what the Republicans like Rubio might say, the investment community is taking this seriously.
Pension funds are the biggest investors in the stock market, and start several years ago they started asking boards what they planed to do about changing weather.
Corporate Shareholders Are Getting Nervous About How Climate Change Will Affect Their Investments (2013)
Some of the US’s largest public pension funds were among those filing resolutions, including the California State Teachers’ Retirement System and the New York State and New York City Comptrollers’ Offices. Ceres estimates that along with other large institutional investors these groups manage funds worth in excess of $500 billion in assets.
“The strength of this year’s proxy season shows unwavering investor concern about how companies, especially energy companies, are managing the profound climate-related risks of fossil fuel production, including traditional and unconventional oil and gas extraction,” said Mindy Lubber, president of Ceres.
Tim Cook of Apple has gotten the most press lately by flat out telling investors that global warm is real, and they need to get real too.
Apple CEO to Global Warming Deniers: We Don’t Want Your Money
"Here's the bottom line: Apple is as obsessed with the theory of so-called climate change as its board member Al Gore is," said Danhof. "The company's CEO fervently wants investors who care more about return on investments than reducing CO2 emissions to no longer invest in Apple. Maybe they should take him up on that advice."
Exxon, who had multiple global warm proxy votes in years passed just flat out banned them this year.
Exxon Mobil manages to avoid shareholders vote on global warming
The ExxonMobil shareholders had fifteen resolutions to vote on at their annual meeting in May, and only one was indirectly related to global warming. It was the first time in 10 years that the Interfaith Center for Corporate Responsibility (ICCR) did not introduce resolutions on global warming. Last year the ICCR sponsored the Kyoto Compliance Resolution, which received a 28.3 percent vote. It was the highest vote ever received for an environmentally-related resolution.
This year, ExxonMobil decided to keep global warming resolutions from coming to a vote by shareholders. All shareholders resolutions must be submitted under the rules of the Securities and Exchange Commission. Companies have a right to keep resolutions out of the proxy by arguing their case before the commission. ExxonMobil argued against three resolutions submitted by the ICCR and won.
The insurance companies are paying attention too.
For Insurers, No Doubts on Climate Change (2013)
And the industry expects the situation will get worse. “Numerous studies assume a rise in summer drought periods in North America in the future and an increasing probability of severe cyclones relatively far north along the U.S. East Coast in the long term,” said Peter Höppe, who heads Geo Risks Research at the reinsurance giant Munich Re. “The rise in sea level caused by climate change will further increase the risk of storm surge.” Most insurers, including the reinsurance companies that bear much of the ultimate risk in the industry, have little time for the arguments heard in some right-wing circles that climate change isn’t happening, and are quite comfortable with the scientific consensus that burning fossil fuels is the main culprit of global warming.
“Insurance is heavily dependent on scientific thought,” Frank Nutter, president of the Reinsurance Association of America, told me last week. “It is not as amenable to politicized scientific thought.”
Bloomberg has been running multiple articles about how to profit from global warming, which includes this rather depressing investment opportunity.
Investors Seek Ways to Profit From Global Warming
Jason Drew is among the investors who have bet about $30 million on Oxitec, an Abingdon (England)-based startup that’s developed a special kind of mosquito: one that can’t reproduce. When an Oxitec mosquito mates with a wild female, the offspring will not survive to adulthood, so the mosquito population declines. The company is exporting the test-tube skeeters to the increasing number of countries coping with outbreaks of dengue, a mosquito-borne disease whose spread has been aided by rising temperatures and increased humidity. (Health authorities in the Florida Keys reported 66 cases of locally acquired dengue in 2010.) “When the mosquitoes move quite rapidly over a relatively short period of time, human resistance [to the virus] doesn’t build up quickly enough,” Drew says.
Which brings us back to the S&P
How Climate Change Will Destroy Your Country's Credit Rating
Yet clearly the rating agency is thinking about it. In the report, S&P scored a nation’s vulnerability to climate change-related credit risk according to what percentage of its population lives in coastal areas that are 16 feet or less above sea level; agriculture’s share of gross domestic product, given food production is highly dependent on climate; and its ranking on the Notre Dame University Global Adaptation Index, which measures a country’s ability to adapt to climate change.
I really really wish we had a Republican party that was willing to at least talk about global warming. Maybe they could have something to say about mitigating job loss. My 401k and your pension fund are dependent on it. But they do not anything to say.
The pension fund managers get it. The Insurance companies get it. The investors get it. Why the hell does not the Republican party get it?
While we are waiting for the Republican Party to say SOMETHING, all I can suggest it that you invest in companies that have possible solutions to dengue fever.