LONDON Major investors from the U.S., Canada
and the UK are pressuring the United States Securities and
Exchange Commission (SEC) to require energy companies to assess
the environmental impact of oil and natural gas reserves.
A group of 19 environmental, investor and non-profit groups
want the regulators, under new proposals, to ask that oil and
gas companies disclose reported reserves that have higher than
average greenhouse gas emissions associated with their
extraction, production and combustion.
The group includes London's F&C Asset Management, UK-based
Ceres Power and the California Public employees' Retirement
System (CalPERS), the largest U.S. pension fund.
"We urge the SEC to pay more careful attention to the
implications of climate change and carbon-related regulations
... since the risks and challenges posed are likely to grow
rapidly in the coming years, with significant consequences for
the oil and gas industries," the group said in an open letter.
"We are concerned that climate change, and policies adopted
to combat greenhouse gas emissions, could render certain assets
-- particularly those with high carbon intensity --
Governments in the U.S. and Canada are considering climate
change legislation that introduces so-called cap and trade
schemes, limiting national emissions and putting a price on
carbon dioxide (CO2).
Under such schemes, companies with carbon-intensive
operations will be forced to buy permits to cover their
"Putting a price on carbon will change the dynamics of the
energy marketplace," Daniel Yergin, chairman of Cambridge
Energy Research Associates (CERA), said in a report earlier
Heavy industry in the European Union have had to pay for
emissions since 2005. European CO2 permits currently trade
around 23.00 euros ($32.56) per metric ton.
With mandatory emissions reporting, the investors said they
can assess the risk profile of energy companies more
"The energy consumption required to extract a barrel from
Canadian tar sands is very different to a simple barrel of
crude from the Gulf of Mexico," said Elizabeth McGeveran, a
senior vice president at F&C, in a statement.
Research published on Tuesday on the potential impact of
emissions trading schemes on superannuation funds shows that
implementing carbon-efficient investment strategies does not
hurt returns, UK-based environmental researchers Trucost said.
Norway's sovereign wealth fund sold its entire $850 million
stake in mining group Rio Tinto, blaming it for environmental
damage in Indonesia, the Norwegian government said this week.
(Editing by Michael Urquhart)