Dear ATCA Colleagues; dear IntentBloggers

[Please note that the views presented by individual contributors are not necessarily representative of the views of ATCA, which is neutral. ATCA conducts collective Socratic dialogue on global opportunities and threats.]

We are grateful to Dr Matthew Kiernan from Toronto, Canada, for his submission to ATCA, "CARBON DISCLOSURE PROJECT: More Action on the Climate Chaos Front."

Dr Matthew Kiernan is Founder and Chief Executive of Innovest Strategic Value Advisors Inc, an environmental investment research firm based in New York, Toronto and London. Innovest's clients include a number of Fortune 100 companies, as well as several of America's largest institutional investors. Dr Kiernan had previously co-founded a strategy consulting company which he later sold to KPMG Peat Marwick, one of the largest business consultancies in the world, where he then served as a senior partner. Previously, he was Director of The Business Council for Sustainable Development (BCSD), a Geneva-based group including the CEOs of such leading industrial companies as DuPont, Volkswagen, Royal/Dutch Shell, Asea Brown Boveri and Mitsubishi. The BCSD -- now the WBCSD -- served as the Principal Business and Industry Advisor to the Secretary General of the UN Earth Summit in Rio de Janeiro (1992) and Dr Kiernan directed the group's Capital Markets Task Force. He has also lectured on environmental finance in senior executive programs at the Wharton School, Columbia Business School, and Oxford University. He holds advanced degrees in political science and environmental studies, as well as a PhD in strategic environmental management from the University of London. His recent publications on environmental factors in global competitive strategy appear in a number of leading business journals, and his new book, The 11 Commandments of 21st Century Management, is published by Simon & Schuster and has been translated into six languages. He writes:

Dear DK and Colleagues

Re: CARBON DISCLOSURE PROJECT: More Action on the Climate Chaos Front

The last thirty days have been busy ones indeed for the climate chaos file. First, UK Prime Minister Blair and California Governor Schwarzenegger announced an ambitious trans-Atlantic collaboration on countering climate chaos that neatly bypassed (and, of course, in so doing, highlighted) US federal intransigence and immobilisation on the topic.

Next, the State of California has passed landmark legislation to bring UK-style carbon regulation a giant step closer to reality in America. Next up will be the international launches of the Carbon Disclosure Project (CDP). The first will occur on September 18th in New York City, with others are to follow in London, Frankfurt, Tokyo, Sao Paulo, Sydney, Paris, and elsewhere. Former US Vice-President, Al Gore, will be headlining the New York launch. ( ATCA members are encouraged to visit the CDP website, at

Now in its fourth year, the CDP is arguably the largest collaboration among institutional investors in history. This year's CDP unites 225 institutional investors, with a staggering USD 30 trillion in combined assets either owned or under management. As in previous years, the group has written to the Chief Executives of the FT Global 500 -- the 500 largest publicly-traded companies in the world -- asking them some pointed questions about their responses (or lack thereof) to the climate problematic.

This year's "information request" had the greatest gravitas to date, with a seven-fold increase in shareholder assets behind the questions relative to the project's first year. The results, as always, were illuminating. Among the Report's most salient findings:

. Climate risk potentially impacts a much broader range of industry sectors than generally acknowledged;
. The variability of climate risk is considerable, both between and even within industry sectors;
. Contrary to widespread opinion, climate chaos can also bring significant economic opportunities and benefits, including accelerating energy efficiency and the commercialisation of "clean" technologies;
. Accordingly, climate risk has three dimensions, not just one. In addition to the potential level of risk, investors need to consider two further factors: companies' ability to manage that risk, and their ability to recognize and seize commercial opportunities on the upside;
. For some, well-positioned firms, carbon regulations could actually be financially beneficial; and
. While investors as a group are now far more aware of climate chaos, very few have to date acted on that awareness by integrating climate risk into their day-to-day investment decisions.

This last point is especially critical, but fortunately it is likely to be significantly less true even ninety days from now than it is today. Behind the scenes, some substantial commitments are currently being made by blue-chip institutions to innovative new investment strategies which explicitly factor in climate risk.

As I have previously argued to ATCA colleagues and others, once the major purveyors of the "financial oxygen supply" of major transnational companies (ie, their institutional owners) begin allocating their investment capital in a different, climate-conscious way, the companies will inevitably change their attitudes, strategies, and behaviour -- all for the better.

With best regards,