Transcript Implementing the UN Principles for Responsible Investment

The role of Consumers
and Corporates in tackling
Climate Change
～How do companies and consumers
interact on the issue of
climate change?～
Stephen Hine, 15 June 2009
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EIRIS
• Experts in Responsible Investment
Solutions
• Over 25 years experience (founded 1983)
• Leading global provider of ESG research
• Non-profit organisation & independent
• Global coverage (3,000 companies) - FTSE
All-World Developed, MSCI
• EPM software
• 100 clients including pension funds and
institutional investors
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Factors in consumer engagement
(1)Regulations & Standards
(2)Communication and engagement –
Company-led initiatives and consumer-led
initiatives
(3)Labelling Schemes – energy efficiency, ecolabels and climate change labels
(4)Independent assurance and verification –
for increasing transparency, credibility and
recovering consumer trust
(5)Product innovation and marketing
strategies – for attracting consumers
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Key findings: Consumer trends
• Only a minority of consumers are
prepared to pay a premium for products
with lower carbon emission impact.
• Financial incentives (reduced tax,
discounted insurance and cost saving) are
the strongest drivers
• A wide range of comparison tools are
available for consumers, however,
assurance or verification systems are not
yet sufficiently developed.
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Key findings: Company responses
Consumer-facing sectors: Supermarkets (27 companies), automobile
manufacturers (31), residential building (24) and electricity sector (68)
listed in the FTSE All World Developed Index
100%
90%
0
14
29
22
80%
70%
0
46
19
36
64
60%
40%
Good
38
50%
12
33
25
Limited
30%
10%
26
24
20%
9
FTSE AWD
42
No evidence
26
25
0%
Intermediate
10
Electricity Supermarkets Automobile Residential
generation
manufacture buildings
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Key findings: Company responses cont.
• Electricity companies: leaders among the
four sectors, strong performance on
disclosure
• A large proportion of supermarkets and
residential building companies: not yet
started public reporting
• The residential building sector lags behind
significantly with many companies without
a basic commitment to address climate
risks.
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Sector findings: Supermarkets
• A wide range of carbon labelling schemes
• However, a need for a more
internationally consistent system for
greater comparability and transparency
• Consumer groups are becoming more
active
• This has yet to be translated in consumer
purchasing decisions
• More proactive consumer involvement in
influencing companies is required
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Sector findings: Automobile
• A limited level of consumer groups’
involvement – stakeholder engagement is
a key area for improvement
• Governments have a key role to play in
setting ambitious targets for reducing
carbon footprint
• Fuel efficiency targets VS carbon tax?
• Support for developing alternative
technology and infrastructure
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Sector findings: Residential buildings
• The complexity of efficiency rating
systems seems to be a source of
confusion to consumers
• Priority should be given to the
simplification of rating systems and
providing the right incentives
• There is ample room for companies to
improve overall commitment and
disclosure levels
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Sector findings: Electricity
• A high level of commitment by
governments, companies and consumer
groups
• However, there is an urgent need to
establish a clear definition of ‘green
electricity’ which should be internationally
consistent and comparable
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Sector findings: Electricity cont.
Commitment by electricity companies
Electricity
Climate Change Overall Response
No evidence
9%
Good
29%
Good
Limited
24%
Intermediate
Limited
No evidence
Intermediate
38%
Climate change overall response
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Opportunities for further development
• Government: provision of a clear framework to
support consumer action on climate change by
establishing targets, incentives and transparent
regulations and standards and consider
internationally consistent and comparable rating/
labelling standards
• Companies: Direct engagement with consumers
and public reporting including product emissions
data
• Consumer groups: Provision of unbiased
information and influencing companies by
campaigning and engaging with them
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Contact details
Stephen Hine
Head of Responsible Investment Development
+44 (0) 20 7840 5716 (direct)
EIRIS, 80 - 84 Bondway, London, SW8 1SF
www.eiris.org
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