Companies Join Investors to Pledge Climate Action

Sept. 22 (Bloomberg) — While U.S. President Barack Obama
and more than 100 other world leaders will meet in a summit
devoted to climate change, the most tangible action on global
warming this week may come from investors and companies.

A foundation tied to the Rockefeller family, heirs to the
Standard Oil Co. fortune, today announced it’s joining other
groups in exiting coal and tar sands investments. Mars Inc. and
11 other companies unveiled plans to phase out fossil-fuel use.
And Statoil ASA and five other oil and gas are set to pledge to
plug methane leaks.

“The leadership from companies has been remarkable and
welcome,” Carter Roberts, the president of the World Wildlife
Fund in Washington, said in an interview. “You will see a swirl
of commitments.”

The United Nations Climate Summit runs all day tomorrow at
the United Nations in New York, just before the annual meeting
of the General Assembly. After the estimated 125 leaders speak,
limited to four minutes each, specific pledges from companies
will be discussed at an afternoon session Secretary General Ban Ki-Moon is hosting with executives from companies such as Air
France-KLM
, Siemens AG, Royal Dutch Shell Plc and McDonald’s
Corp.
, as well as author Naomi Klein and former U.S. Vice
President Al Gore.

Divesting Momentum

Companies not participating also will feel heat: The
Rockefeller Brothers Fund is now one of 180 institutions and
local governments and 654 individuals who have so far pledged to
cut investments in 200 coal, oil and gas producers from their
asset holdings. Total divested funds are $50 billion, as
commitments to sell have doubled so far this year, according to
Arabella Advisors, which works with philanthropic groups on
their investments.

With the Rockefeller Brothers Fund, managing assets of
about $860 million, set to pull out of coal and oil sands, and
to look at phasing out investments in oil and natural gas, the
effort will get a symbolic boost.

“It’s not a huge economic lever, but it does begin to send
financial signals and it brings visibility to the issue,”
Stephen Heintz, president of the fund that is separate from the
larger Rockefeller Foundation, said in an interview. “This is
like a snowball, and it’s going to get more and more mass as it
rolls forward.”

Treaty Momentum

The aim of the summit, Ban said, is to gather momentum for
climate negotiations that are set to conclude at a meeting in
Paris next December. The goal is to curb the release of carbon
dioxide and other warming gases so that average global
temperatures don’t rise more than 2 degrees Celsius.

In a report today, scientists said carbon dioxide emissions
from burning fossil fuel are set to rise 2.5 percent this year
to a record 40 billion tons.

“I’m really going to ask world leaders to show their
political will and give a clear guidance and directions” to
negotiators, Ban said in an interview Sept. 18. “I count on the
U.S. and China, who are the biggest greenhouse-emitting
countries” to “lead this campaign.”

Ban was among 310,000 who took to the streets of Manhattan
yesterday to press for action in what organizers called the
largest social demonstration in the city in a decade. New York
Mayor Bill de Blasio, who also marched, announced a plan to cut
the city’s emissions 80 percent by 2050.

People Power

“Since the fossil fuel companies have money, we have to
have something on our side, and that’s people,” said Bill
McKibben, the head of 350.org, the organizing group.

The UN summit took a symbolic hit after China, the world’s
top carbon polluter, and India, third biggest after the U.S.,
decided not to send their top political leaders. That’s
important because the last attempt at a global accord broke down
in Copenhagen in 2009, when the talks dissolved into finger-pointing between rich and poor nations over which group should
move first on emissions reductions.

With the heavy lifting of the negotiations months away,
officials aren’t expecting new breakthroughs from the government
leaders this week, and the final deal is likely to fall short of
the far-reaching legal framework of the 1997 Kyoto Protocol.

“This really is not a negotiating session. It was never
intended to be that,” Todd Stern, the lead U.S. State
Department negotiator, told reporters last week. “What would be
very important is that we have strong indications of seriousness
and commitment by the leaders.”

Company Pledges

In the meantime, much of the focus is on what companies are
doing or should do.

“Policy makers need to hear the voice of business, because
there is the conventional wisdom that they don’t want to do
anything,” said Nigel Topping, executive director of CDP, a
firm that tracks companies’ disclosure of their emissions.
That’s not the case, “and we think that could shift the
dynamic.”

Some corporate leaders see cutting their carbon footprint
as an economic necessity or business opportunity, Topping said.
Already more than 150 companies worldwide use an estimated price
on carbon to determine which long-term investments make sense,
up from 100 just a year ago, CDP said in a report released last
week.

To be sure, advocates for curbing carbon emissions — even
among the corporations — say that the company actions won’t
come close to addressing the problem.

‘Individual Actors’

“Absolutely, we can’t do it alone, not as a business, not
as businesses and not as individual actors,” Jeff Seabright,
head of sustainability at Unilever NV, said in an interview.
“It will require governments to take action.”

Candy-maker Mars pledged in 2010 that it would transition
to full renewable power for its factories and offices by 2040,
and today it’s signing on with other companies ready to take
that same pledge.

“We’re looking to drive more and more people into this way
of thinking,” Kevin Rabinovitch, director of sustainability at
Mars, said in an interview.

The World Bank corralled more than 1,000 companies and
investors in support of a carbon price, which means either a tax
on carbon or a cap on carbon and an emissions trading system,
including companies such as Unilever and Swiss Re. Countries
such as Russia and China also signed on to the pledge.

“You are getting an affirmation that carbon needs a
price,” Rachel Kyte, the World Bank vice president responsible
for the effort, said in an interview. “There is more and more
attention on the exposure to carbon assets.”

Deforestation Pledge

Separately, environmental advocates have pulled together a
group of companies that are set to announce tomorrow their
pledge to make sure their purchases of palm oil or soy products
don’t lead to deforestation. Forests absorb carbon dioxide, and
clearing old forests for farmland or palm trees is a major cause
of global warming. Agriculture is responsible for a fifth of
total global emissions.

And six oil and gas producers, including Statoil and
Houston-based Southwestern Energy Co., will join with
environmental groups to pledge reductions in the methane they
release.

Students and activist investors have rallied around the
effort spearheaded by 350.org to persuade foundations such as
the Rockefeller Brothers Fund, corporations, universities and
others to divest from the 200 companies with the largest share
of coal and oil resources, including India Coal Ltd. and Exxon
Mobil Corp.

Desmond Tutu

In a symbolic boost, South African cleric Desmond Tutu, who
helped spur calls for divestment that led to the end of
apartheid in his home nation in the 1980s, will offer a video in
support of the cause.

Asked about Exxon being targeted by the divestment effort,
a company spokesman referred to a report it released earlier
this year.

“Energy use and mix evolve slowly due to the vast size of
the global energy system,” the Exxon report said. “We believe
the transition to lower carbon energy sources will also take
time, despite rapid growth rates for such sources.”

Nagendra Kumar, Coal India’s technical director, said, “We
are fully conscious of our responsibility towards the
environment and taking every possible step to help the cause of
environment.”

The UN’s lead climate negotiator said the pledges from
companies and discussion of leaders presented an “unprecedented
collaboration” that will boost the negotiations on a global
accord.

“Every single sector that has emissions will be here to
share what they can do,” said Christiana Figueres, executive
secretary of the UN Framework Convention on Climate Change.
“This is the moment in which we all should stand up. The shift
to low carbon has started and is irreversible.”

To contact the reporter on this story:
Mark Drajem in Washington at
mdrajem@bloomberg.net

To contact the editors responsible for this story:
Jon Morgan at
jmorgan97@bloomberg.net;
Steve Geimann at
sgeimann@bloomberg.net
Steve Geimann, Michael Shepard

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