The group of investors, which includes BlackRock, British Columbia Investment Management Corporation and the AFL-CIO Office of Investment, drafted a proposal that calls for companies to disclose an ESG materiality assessment process, a sustainability table of disclosures that would map the locations of ESG content in public documents, and ESG reporting on eight key issues.

The public comment period for the INCR Listing Standards Drafting Committee Consultation Paper: Proposed Sustainability Disclosure Listing Standard for Global Stock Exchanges ends May 30.

The investor group, along with NASDAQ OMX, say the consultation paper is an effort to develop a uniform standard that all stock exchanges can use.

The final document, once investors have provided feedback, will be submitted to stock exchanges for review and later for consideration at the World Federation of Exchanges annual meeting in October.

Earlier this month, both FTSE Group and Thomson Reuters launched ESG-related indices.

The Thomson Reuters Corporate Responsibility Indices were developed jointly with S-Network Global Indexes, a New York-based specialist index design firm. The firms say unlike the majority of ESG indices, their indices mirror the performance of major global benchmarks via companies that have substantially higher ESG ratings than the weighted average for such indices as the S&P 500 or MSCI EAFE.

FTSE Group’s environmental technologies index, FTSE ET100, is designed to measure the performance of companies whose core business is in the development and operation of environmental technologies.

To qualify, companies must derive at least 50 percent of their business from environmental markets. These include renewable and alternative energy, energy efficiency, water infrastructure and technology, waste management and technologies, pollution control and environmental support services, as defined by the FTSE environmental markets classification system.

Many investors and business leaders are aware of management guru Peter Drucker, but don't take some of his wise words and philosophy seriously enough. Our modern age has been plagued by the rise of far more short-term managers than long-term leaders. We've all been the poorer for it.

Sustainability advocacy organization Ceres held its annual conference in San Francisco last week, and it was full of thought-provoking presentations and conversations about sustainability and environmental, social, and governance (ESG) opportunities and challenges.

Skoll Foundation's President and CEO Sally Osberg referenced Drucker's quote above while chatting to Sprint CEO Dan Hesse about the wireless industry and its role in the future, particularly in sustainability.

Let's talk about managing vs. truly leading a company into the future. One thing I'm thinking is the way corporate managers tend to cut costs and the need for investors to rethink the definition of reducing costs and adding value.

Read between the (top and bottom) lines
Investors look for reducing costs and boosting profits, but, sadly, the most brutal means to that end enjoy the most positive reinforcement. Have you ever seen a stock soar because management announced mass layoffs? These types of events do reduce costs, maybe, but they include non-tangible value destroyers such as loss of intellectual capital, trampled employee morale, and deteriorating customer service and product quality.

True leadership supports workers, long-term strong business, and reducing costs by innovating, not slashing workforces that managements may have allowed to become too bloated or badly utilized in the first place. There is no more short-term action than bidding up a company's shares on a layoff initiative. That's trader pathology, and it encourages pathological short-term thinking by managements, too.

Strangely, a more positive cost-reduction strategy rarely excites investors at all, even though it's a far better way to boost efficiency, lower costs, and avoid damages and liabilities.

Green initiatives are increasingly proving to be money-saving or even money-making opportunities, as well as value drivers that are less immediately recognizable. Many major companies are recognizing the opportunities, whether investors are reading the writing on the wall or not.

Hacking away at waste
Dan Hesse's address to Ceres' audience touched on the company's industry-leading sustainability initiatives. These initiatives have generated kudos for Sprint; it ranks No. 3 in the U.S. on Newsweek's annual list of green companies, and Frost & Sullivan gave it the 2012 North American Award for Green Excellence for 2012.

This isn't just award-winning, feel-good fluff, though. Sprint's efforts feed positively into its business. Since 2007, Sprint has realized upward of $60 million in savings from eco-friendly initiatives. Having reduced its packaging size by 60%, more products fit on planes and trucks. A recent white paper spells out Sprint's work on packaging efficiency and waste reduction.

Take Sprint's unique eco-envelope, which allows customers to receive and remit their bills in one handy, reusable envelope. That smart envelope saved an estimated 700 tons of paper in just under a year.

Sprint's industry-leading mobile phone buyback program is also a win-win. Spring will take back handsets back from customers, including those from other carriers, and by paying those trading them in, it incentivizes consumers not to throw them into landfills. Sprint then refurbishes or remanufactures, so it can offer lower-cost phones to consumers as pre-owned, certified devices.

Positive practice makes perfect
Although Hesse did discuss lower bills attributed to cutting energy, water, and paper usage, he also pointed out sustainability's strong intangible assets that build over time. Such initiatives make employees feel good about working for Sprint. When recruiting on college campuses, young people get jazzed by the idea of working for a green company. It's a talent attractor.

Meanwhile, Sprint is not the only company that discusses the bottom-line benefits of sustainability, whether they're tangible or not.

One of Ceres' panels on water usage included Molson Coors' Michael Glade, who pointed out a factor investors might miss. The company's efforts to "demonstrate positive practice," as Glade put it, have improved its water usage. Better water, energy, and waste practices stacked up to $10 million in savings for the beer manufacturer since 2008, and will represent another $16 million in savings through 2012. That's another example of sustainability's bottom-line boosting capabilities that accompany the feel-good component.

"Demonstrating positive practice" was one of the themes at the conference. For example, Hesse also discussed the ability to influence the competition by leading the pack.

For example of moves by another industry player, several weeks ago, Verizon announced big plans of its own. It will invest $100 million in solar panels and fuel cells provided by SunPower and ClearEdge Power, respectively. These will represent up to 70 million kilowatt hours of electricity, the equivalent of the power needed for 6,000 homes per year. Verizon also said it will cut its carbon emissions footprint by 50% by 2020. Its increasing initiatives are expected to significantly reduce fuel and energy costs, as well as green up its operations.

Look for leaders
More companies are evolving, going green, and investing in long-term initiatives that will cut costs, create value, and go easier on the planet and endangered resources. Hopefully, more investors will realize that short-term "solutions" like layoffs are, for the most part, resulting from bad decisions, if not complete managerial failures.

We're still in the first innings of the sustainability megatrend, and as more and more corporations embark on these initiatives, more and more will engage in "good competition," which is good for all of us. Competing to do the -- right -- things, instead of the damaging ones, would put our investments -- and our world -- in much better positions for the future.

Leaders indeed do the right thing, even if it's going to take a while. That takes vision and courage. Are your companies' managers up to the challenge? Your investment returns really could suffer if they aren't.

Hydraulic fracturing uses large amounts of pressurized water — mixed with sand and chemicals — to crack subterranean rocks and release oil or natural gas. Up to 10 million gallons of water can go into a single well.

And according to a new study, it’s happening in many places where water supplies are already stretched perilously thin.

The study, released today by the nonprofit group Ceres, examined 25,450 fracked wells across the United States and found that 47 percent lie in areas that face high or extremely high “water stress.” In those areas, at least 80 percent of the available fresh water is already being used in homes, farms or businesses.

The numbers have big implications.

Fracking has triggered an oil and gas drilling boom across the United States, from Pennsylvania to California. But some places that have seen extensive fracking, such as west Texas and Colorado, have suffered recent droughts. Even in good years, they aren’t exactly drenched in rain.

The spread of fracking could lead to competition among drillers, farmers and homeowners, said Monika Freyman, manager of the water program at Ceres.

“It’s already starting to happen,” said Freyman, who co-wrote the report. “The companies will be able to get their water, because they can afford to pay the most. But it’s going to increase the competition and conflicts for water, especially in regions that are experiencing drought.”

Ceres works with investors and businesses to encourage sustainability, with a particular focus on climate change and water scarcity. Freyman and her colleagues used records from FracFocus, a website where oil and gas companies post information on fracked wells. They compared the location of the wells to water supply data from the World Resources Institute.

The FracFocus well records run from January of 2011 through September of 2012. During that period, 65.8 billion gallons of water were pumped underground for fracking, according to the study. And that figure — roughly equal to the amount of water 2.5 million Americans use in a year — is almost certainly an undercount. Not every oil company reports its fracking operations on FracFocus.

California, which just ended a rainy season remarkably free of rain, does not feature prominently in the Ceres report.

So far, fracking has not become as widespread here as it has in North Dakota or Texas. And California’s unique underground geology has limited the amount of water needed for fracking. Shale rocks here contain large amounts of briney water along with the oil, so pressurizing the well doesn’t take as much water pumped from the surface.

During the study period, the average fracked well in California used 166,714 gallons of water, according to Ceres.

Ceres wants the companies that engage in fracking to do a better job planning for water use and recycling, and having discussions about both with the public. Unlike many of its environmental allies, the organization does not take a position on fracking itself, pro or con.

“We really want to see better water management planning, from industry and regulators and water managers,” Freyman said. “That will start the dialogue on, ‘How are you getting your water? What are the challenges to recycling the water? What’s your community engagement on getting that water?’”

“Given projected sharp increases” in the production of oil and gas by the technique commonly known as fracking, the report from the group Ceres said, “and the intense nature of local water demands, competition and conflicts over water should be a growing concern for companies, policy makers and investors.”

The overall amount of water used for fracking, even in states like Colorado and Texas that have been through severe droughts in recent years, is still small: in many cases 1 percent or even as little as a tenth of 1 percent of overall consumption, far less than agricultural or municipal uses.

But those figures mask more significant local effects, the report’s author, Monika Freyman, said in an interview. “You have to look at a county-by-county scale to capture the intense and short-term impact on water supplies,” she said.

“The whole drilling and fracking process is a well-orchestrated, moment-by-moment process” requiring that one million to five million gallons of water are available for a brief period, she added. “They need an intense amount of water for a few days, and that’s it.”

One of the options that oil and gas drillers have is recycling the water that comes back out of wells, which is called “produced water.” But the water injected into wells is laced with a proprietary mixture of chemicals and sand, and the water returning from thousands of feet below the surface can also contain natural pollutants or even radioactivity. Recycled water must therefore be treated, which can be expensive.

An earlier report done by engineers at the University of Texas, Austin, showed that 8,800 acre-feet — nearly 2.9 billion gallons — were used for fracking in 2011 in Tarrant County in North Texas, where Fort Worth is located and which has gone to the Supreme Court to get access to Oklahoma’s water.

And in the Eagle Ford shale formation in South Texas, particularly in Webb County, some researchers estimate that the amount of water used for fracking represents as much as one-third of the area’s annual groundwater recharge, the amount of surface water that percolates back to the underground aquifer supplying the region.

But the Ceres report notes that drillers in the Eagle Ford formation are also expanding their use of brackish, undrinkable water in place of fresh water.

While the local effects in Texas have been sufficient to spur the state’s Railroad Commission, which regulates the oil and gas industry there, to encourage recycling by loosening rules governing that process, it is Colorado that faces the most widespread potential conflicts between fracking and other water uses, according to Ceres’s new report.

Kenneth H. Carlson, an engineering professor at Colorado State University, saw little difference between drillers buying needed water and cities buying water from farmers. “It’s a private commodity that people can do with what they want,” he said. “We’re not going to go thirsty. We’re just going to have to pay more.”

The effects of climate change are of course unpredictable on a regional basis - not everywhere for example is getting hotter and dryer - but the UN predicts extreme weather events will present a growing challenge to our daily existence, and for that matter to many businesses.

Sharlene Leurig is a Senior Manager at Ceres, a nonprofit organisation that argues for greater sustainability. She's recently written a report about what she sees as a severe failing in the US insurance industry to respond to the commercial threats that climate change poses. John Coomber represents a range of European Insurers, who have formed Climatewise, a leadership group within the industry to drive action on climate change risk. And can new technology help us to build so as to better weather the storms?

Listen to the interview here.

There are myriad lessons that have emerged from the storm, but here are four key issues deserving of special attention.

Floodwaters pour into the Hoboken PATH Station in Hoboken, N.J., near the time of high tide on Oct. 29, 2012, as Hurricane Sandy made landfall.
Credit: The Port Authority of New York and New Jersey.

First and foremost, Sandy drove home the need to rethink coastal development practices that encourage growth in vulnerable areas. Second, the storm, which was forecasted well in advance, proved the value of a robust weather and climate forecasting infrastructure at a time of budget austerity. Third, Sandy revealed a disconnect between the weather community, emergency management officials, and the public when it comes to warnings about an unusually complicated severe weather hazard.

Finally, while direct links between the storm and climate change are difficult to discern, it should be seen as ushering in a new era of consequences for coastal areas due to the combination of long-term, global warming-related sea level rise and storm surges from hurricanes, Nor’easters, and other storms.

Lesson 1: Rethink Coastal Development

Hurricane Sandy delivered a clear message that the relentless pursuit of coastal development needs to be rethought. According to the National Oceanic and Atmospheric Administration (NOAA), 39 percent of the U.S. population lives in counties directly on the shoreline, and if current population trends continue, that coastal population will grow to nearly 134 million from 122 million by 2020.

In Sandy’s wake, federal flood insurance policies that subsidize growth in vulnerable areas are being re-evaluated, as are state and local regulations that have inadvertently put people in harms’ way. One federally funded program in New York is allowing the government to buy out homeowners who have damaged property in the most prone locations, rather than encouraging them to rebuild.

But as the New York Times reported on April 26, that program is being met with mixed success, as many storm victims are choosing to rebuild rather than move.

New York Gov. Andrew Cuomo (D) has repeatedly emphasized the need to redevelop the state’s coastline in a smarter, more storm-resistant way. “We can never make up for the hardship that people went through,” he said at an April news conference, “but we can use this as a learning and an improving opportunity.”

Coastal flooding in Mantoloking, N.J., as taken from a New Jersey Air National Guard Helicopter. Credit: NJNG/Scott Anema.

Cuomo’s message, though, has not done much to change the status quo. Policy makers have not come anywhere close to settling on a broader plan to protect New York City from another damaging storm-surge event. Projects, such as building a surge barrier at the entrance to the harbor, for example, largely remain at the drawing-board stage.

“There has been much more talk than action in rethinking coastal development. Many landowners have chosen to rebuild in place, meaning they’re willing to take the risk of another Sandy,” said Michael Gerrard, a law professor who directs Columbia University’s Center for Climate Change Law.

“Few, if any, firm rules have been issued by any agency,” Gerrard said. “No announcements have been made of major changes in the siting of infrastructure. We seem to be witnessing, for the most part, a continuation of business as usual, with a twinge of anxiety and a lot of meetings.”

For the insurance industry, Hurricane Sandy was another example of the rising costs of natural disasters, and a warning of the coming consequences due to sea level rise and extreme weather events. According to the reinsurance company Swiss Re, Hurricane Sandy cost at least $70 billion in total damage, with $35 billion in insured losses.

“Hurricane Sandy was a wake-up call that our coastlines are increasingly vulnerable to storm surges from rising sea levels. Low-lying coastal areas with dense concentrations of property may no longer be suitable for building and rebuilding. Difficult decisions will need to be made,” said Cynthia McHale, who directs the insurance program at Ceres, which is a national coalition of investors and environmental organizations focused on sustainability. She said insurers are raising rates in coastal locations, while pushing for governmental action to reduce the risk of more damaging events.

“We have a choice: to either gamble on bigger long-term risks or preemptively invest to make vulnerable coastal cities more climate resilient, thereby making today’s at-risk areas more insurable,” McHale said.

Lesson 2: Invest in Weather and Climate Infrastructure

For weather forecasters, Hurricane Sandy was largely a success story, as advances in remote sensing and computer-modeling techniques enabled meteorologists to accurately predict the storm’s path nearly one week in advance. Crucially, computer models — particularly a model developed by the European Center for Medium Range Weather Forecasts — foresaw the westward turn that Sandy took after moving parallel to the East Coast. That left hook brought the storm into the Mid-Atlantic states at a perpendicular angle, which put areas along and to the north of the storm’s center — all of New Jersey north of Atlantic City as well as southeastern New England — in the area of the strongest winds and highest seas, thereby maximizing the storm surge there.

Historical tracks of tropical storms and hurricanes in the Mid-Atlantic and Northeast, with Hurricane Sandy's track indicated.
Credit: NOAA via Bob Henson, UCAR.

As researchers have since shown, Sandy’s track was likely unprecedented compared to the historical records of tropical storms and hurricanes in the region.

The storm clearly demonstrated the value of weather monitoring and forecasting technology, and the need to continue to invest in both, which has been an uphill fight on Capitol Hill, given the recent emphasis on budget cuts.

“I think Sandy helped with identifying for the public how crucial a national federal infrastructure is for these scale events,” said Marshall Shepherd, a meteorology professor at the University of Georgia and the current president of the American Meteorological Society. “Sandy was not owned by one jurisdiction and required a coordinated federal response.”

NOAA officials have repeatedly cited Sandy in their lobbying push for continued funding for the next-generation of polar-orbiting satellites, telling Congress and the public that forecasts would be far less accurate if just one satellite were to go dark.

Lesson 3: Learn from Communications Failures

While forecasters succeeded in accurately predicting the path and impacts of the storm, there were flaws in how the threat was communicated to the public. For starters, there were no hurricane watches or warnings issued north of the North Carolina coastline, since the National Hurricane Center in Miami, Fla., feared that confusion might result if they were to issue such warnings only to drop them once the storm transitioned from a purely tropical one to a “post-tropical” storm system, which it did on Oct. 29, 2012, shortly before landfall. In such a scenario, the public might wrongly think the danger had passed, NOAA officials said.

A computer model projection made on Oct. 28, for sea level pressure and winds a few thousand feet above the surface on Oct. 30, as Hurricane Sandy crosses the New Jersey coastline. Credit: Weatherbell.com.

During Sandy, the National Weather Service was operating under a set of rules — since changed — that restricted their ability to leave hurricane warnings in effect after a hurricane transitions into a post-tropical storm. According to the new guidelines, drawn up in Sandy’s wake, forecasters will have the option of continuing tropical storm and hurricane warnings after a storm makes the post-tropical transition.
 It is not clear yet to what extent the lack of hurricane warnings played in evacuation decisions, but some have speculated that it may have contributed to New York Mayor Michael Bloomberg’s decision to hold off on evacuation orders until just 24 hours in advance, which likely limited the number of evacuees.

Another communications challenge concerned the strength of the storm. Since Hurricane Sandy was a Category 1 storm on the Saffir-Simpson scale as it approached the Mid-Atlantic states, some may have dismissed it as a minor threat along the lines of Tropical Storm Irene, which hit in 2011 and caused comparatively minor damage in New Jersey and New York.

The Saffir-Simpson scale does not take into account a storm’s size or its potential storm surge, making it an incomplete indicator of a storm’s damage potential. A large Category 1 or 2 storm like Sandy can cause just as much coastal devastation as a small Category 3 storm, for example. Furthermore, sea level rise means that any storm, be it a weak or major hurricane, may be more damaging than a similar storm occurring several decades ago. Discussions are underway to try to communicate a more complete spectrum of storm threats, rather than having forecasters continue to stress the category designation alone.

One alternative to the Saffir-Simpson scale would provide some of the information that the public currently lacks — a measure of how a storm’s size may contribute to its damage potential. This metric, known as “Integrated Kinetic Energy” or IKE, takes a storm’s size as well as the strength of its winds into account. Hurricane Sandy was the largest hurricane on record, as measured by the diameter of its wind field. Because of its large size, it set a huge expanse of Atlantic Ocean water into motion, ultimately building seas to unprecedented heights at the entrance to New York Harbor .

The Integrated Kinetic Energy calculation was more than 300 terajoules for Hurricane Sandy, which was the largest IKE measurement for any hurricane between 1990 and 2006, which makes it larger than the IKE figure for Hurricane Katrina, which struck the Gulf Coast in 2005.

“If the public was aware that this number was so high, which is an indication of the large potential for damage from storm surge and waves, some of them might have been able to make better life- and property-saving decisions,” said  Vasu Misra, an associate professor of meteorology at Florida State University, in a press release.

Lesson 4: Get Used to the Age of Consequences

For some, Hurricane Sandy became the new poster event of global warming. While attributing certain characteristics of the storm — such as its record size — to global warming is difficult, if not impossible at this time, it is clear that global warming exacerbated the damage by helping to boost sea levels in the affected areas.

Factors that contributed to the top 10 high-water events measured at New York’s Battery Park from 1900 to present. The water height for each event is shown against the benchmark of mean lower low water averaged between 1983 and 2001. Sea level rise (about a foot since 1900) is depicted as a component of storm surge. Although Sandy’s surge peaked close to high tide, other events had even higher tide levels.
Credit: Carlye Calvin and Bob Henson, UCAR; data courtesy Chris Zervas, NOAA National Ocean Service.

In New York City, for example, sea level has risen by about a foot during the past century, due to both sea level rise and local land subsidence. This meant that the record surge rode atop a higher baseline water level than it would have had the storm struck a century ago. And with scientists predicting up to 3 feet of sea level rise by 2100, coastal cities around the world will face even greater threats.

The coastal flooding from Sandy’s storm surge played out nearly exactly as scientists had previously warned in a series of reports commissioned by state and city governments. All of the subway tunnels connecting Brooklyn and Queens with Manhattan were flooded, as was the tunnel linking Hoboken, N.J., and Manhattan. Air travel was paralyzed, too, as all three major New York area airports experienced coastal flooding and were closed for days, along with Teterboro Airport in northern New Jersey, which is the busiest general aviation airport in the country.

Hurricane Sandy fit into the extreme weather theme of 2012. The storm spun its way ashore in the midst of the hottest year on record in the U.S., when sea surface temperatures off the East Coast were also running well above average, and at the same time that one of the worst droughts since the Dust Bowl era of the 1930s was turning the normally productive soil of the Midwest into dust.

One of the more intriguing areas of research that could yield insights into the way climate change contributes to extreme events concerns the jet stream — the high-altitude ribbon of fast-moving air that steers weather systems around the world — and the rapidly warming Arctic, where sea ice plummeted to a record low in September 2012.

The shape of the jet stream that gave rise to Sandy was viewed with awe by some meteorologists, and suspicion by others.

As the storm began moving north-northeast away from the Bahamas, a massive area of High pressure aloft set up shop over northeastern Canada and Greenland. This high, fittingly known as a “blocking high,” prevented Sandy from moving out to sea. At the same time, a deep dip in the jet stream began to dig southward into the Midwest, and the airflow around these two features scooped up Sandy and turned it northwestward, toward land.

Some studies have tied an increase in the “blocking highs” near Greenland, as well as a sharply undulating jet stream in general, to the melting Arctic sea ice, which is one of the most visible signs of a warming planet.

“Our research shows that northward swings, or ridges, in the jet stream have become more frequent in recent decades, exactly in the location where the large blocking high was parked when Sandy came along,” said Jennifer Francis, a meteorology professor at Rutgers University and one of the leading proponents of the Arctic connection hypothesis, in an email conversation. “These ridges favor the development of blocks, and they are just the type of pattern we expect to increase as the Arctic continues to warm much faster than the rest of the northern hemisphere.”

Marshall Shepherd, the president of the American Meteorological Society, said his graduate students have also investigated the Greenland block that was entrenched at the time that Sandy moved out of the tropics, concluding that it was “off the charts” in terms of its strength.

Andrew Kemp, a researcher at the University of Pennsylvania, said forthcoming research shows that sea level rise contributed to the coastal flooding from Sandy, but it was not the largest factor when compared to the timing of the high tide, the storm track, and other variables.

 Still, every inch counts, particularly when critical infrastructure is concerned.

"The risk, of course, is when flood heights exceed the physical thresholds of coastal defenses, and infrastructure is flooded. With all things being equal, sea level rise will make that happen more often," Kemp said in an email.

Regardless of whether global warming helped steer Sandy toward land, the coastal flooding it caused should have been an urgent call to action. The failure of coastal cities to implement any large-scale plans to boost climate and extreme-weather resilience in the wake of Sandy is troubling. It suggest New York, or any other coastal city, may get caught flat-footed once again.

The idea that this cacophony could be harmonized — never mind quieted — has long been an unattainable dream for companies. This week, that dream moves one small step toward reality.

The nearly two years, a nonprofit called GISR — the Global Initiative for Sustainability Ratings — has been working to create a standard for company-level sustainability ratings. It is doing this, it says, “to accelerate the integration of environmental, social and governance (ESG) issues and indicators in investment decision-making” by “building a new standard that equips investors, companies and other stakeholders with the tools to recognize true excellence in corporate sustainability.”

That is, to get Wall Street and its counterparts around the world singing from the same hymnal on sustainability.

GISR does not intend to rate companies on sustainability. Instead, it will accredit other sustainability ratings, rankings or indices that new to its principles, issues and indicators.

GISR, like the Global Reporting Initiative and Ceres, take an investor-centric perspective, with eye on how shareholder interest can move management and markets. Indeed, all three organizations are linked to the Tellus Institute, a Boston-based nonprofit research and policy organization. GISR is a joint program of Ceres and Tellus, as was GRI, which the two groups spun off as a separate organization, now based in Amsterdam.

At the center of both GRI and GISR is Allen White, vice president and senior fellow at Tellus, who directs the institute’s program on "corporate redesign." White is credited with co-founding GRI and served as its acting CEO until 2002. In 2004, he co-founded and now directs of Corporation 2020, an initiative focused on “designing future corporations to create and sustain social mission.”

This week, at the Ceres conference in San Francisco, White and Mark Tulay, the GISR program manager (and former program director at Ceres) are unveiling GISR’s first major initiative: a beta version of GISR’s 12 principles, the core attributes of a ratings framework required to achieve credibility among key stakeholders. The principles are the first step in a multi-year process of building an accreditation process that ratings organizations can begin to use.

This week, GISR also will announce that UPS and McDonald’s have committed to participate in its Supporting Stakeholder program. They join other companies that already are playing an active role in GISR's standard development process, including Bloomberg, Deloitte, Intel, Pax World, TIAA-CREF, and UBS.

Relief from survey fatigue

The ratings system GISR envisions could be a boon to companies suffering from survey fatigue from the dozens of organizations currently rating companies, both multi-issue ratings organizations — such as Dow Jones/SAM, FTSE, MSCI, Oekom, Sustainalytics, Thomson Reuters, and Vigeo — and issue-specific raters — CDP, Climate Counts, Newsweek, Oxfam, Trucost and many others.

According to White, early company response to GISR has been largely positive. “We haven’t had almost a single negative comment or skepticism,” White told me last week. “Ratings are a fact of life for CEOs, who have to get up in the morning and see that they’ve been shoved off the Dow Jones Sustainability Index or dropped down from the Iris score or some other scorecard, and they don’t like it.”

On the other hand, says White, “They feel disempowered because they are the rated entity. They’re asked to fill surveys out, sometimes dozens of surveys every year. And then the scores are published via Newsweek or Corporate Knights or others. The outcomes can be wildly volatile: on a list one year, off the next year; a leader by one rater in the same year, a laggered by another rater in the same year.”

Moreover, he says, companies’ ability to seek recourse for erroneous data or misperceptions can be challenging. “More than occasionally they’ll be met with a black box. They’ll be told that ‘This is intellectual property and we can’t disclose of any of it,’ or in some cases, ‘We can disclose, but it’ll cost you.’”

“Every single company that we’ve spoken to said there’s extreme volatility in these ratings outcomes, coupled with too many surveys and too many indicators,” says Tulay. “They also express concerns about how to engage with these raters. Sometimes there’s a fee associated with getting information on why a company achieved a certain score.”

GISR's principles aim to address such challenges. For example, one them, “Value Chain,” states that “a rating should apply to all portions of a rated company’s value chain over which the company exercises control or significant influence.” The principle  "Transparency" states that “A rating should be transparent to those whose decisions are affected by the application of such rating.” (All 12 principles can be viewed at the end of this article.)

Some of this may seem like common sense, but creating such principles isn’t easy. Take Transparency. There’s a natural tension between raters, who want to maintain their intellectual property, and the rated, who want visibility into what’s behind the ratings. Or Comprehensiveness: While ratings systems themselves need not be comprehensive — many look at just one issue, like greenhouse gas emissions — they need to be comprehensive in the way they look at things.

50 shades of green?

For example, White explains, “If you’re rated on carbon emissions and all that the carbon rater does is to say your emissions went up or your down, or are more or less per dollar of revenue than some other company, that’s actually a very narrowly defined concept of disclosure of carbon emission. There are many, many ways to reduce carbon, some of which have very favorable or positive effects on society, on the economy, on communities, on labor practices relative to others. What about all the aspects of those impacts, positive and negative, quite apart from the absolute up and down numbers?” GISR will require that raters address such issues.

GISR joins an emerging ecosystem of players working to provide investors and others with reliable information on companies’ sustainability performance. It includes

• SASB, which is establishing a methodology for understanding of material sustainability issues facing industries and creating sustainability accounting standards suitable for reporting and disclosure.
• GRI, which established a framework for how companies should report their sustainability information.
• IIRC, which is promoting integrated reporting of both sustainability and financial data

While each of these organizations has a distinct mission and methodology, they share the goal of elevating sustainability among investors by creating a set of relevant tools for measuring, reporting and comparing companies’ sustainability performance. The theory is that once this is possible, investors will reward leaders and punish laggards, moving companies further and faster than regulations and other policy mechanisms.

This week’s release of the 12 principles will precede a public comment period during June and July, followed by the creation of a public registry of sustainability ratings, including the indicators used by each, eventually contained in a searchable database. After that, GISR will produce a guide for asset managers and asset owners to use to assess the suitability of different sustainability ratings for their purposes. GISR also plans to look into developing a sustainability questionnaire app “to help companies address survey fatigue by automating the information pipeline of sustainability information with raters.”

A number of sustainability executives are no doubt panting expectantly right about now.

GISR, for its part, isn’t short of high expectations. I asked White where he sees his organization’s impact five years from now. “Our big vision is that we are a major market mover, equivalent to the way financial ratings have an enormous impact on who raises capital, at what cost, and who gets boxed out of the market because of poor credit standings.”

Will companies eventually be boxed out of markets because of poor sustainability ratings? It’s a pipe dream, at least for now. But if corporate sustainability performance can’t eventually affect markets, the idea of companies collectively moving the needle on sustainability issues is essentially a pipe dream, too.

The 12 GISR Principles

1. Balance: A rating should utilize a mix of sources, issues and indicators that depict both past performance of the company in relation to internally and externally defined targets as well as prospects of future performance based on leading and forward-looking indicators.
2. Comparability: A rating should allow users to compare performance of the same company over time, and different companies in the same industry within the same period.
3. Comprehensiveness: Rating the sustainability performance of a company is a multi-dimensional concept that encompasses impacts on of all forms of capital, including human, intellectual, natural and social.
4. Sustainability Context: A rating should assess performance within the wider context of the company’s impacts at various geographic scales, incorporating scientifically based and/or widely-accepted normative thresholds and limits, applicable to such impacts.
5. Long-term Horizon: By definition, sustainability can only be measured using a long-term perspective. A rating should enable the evaluation of the long-term prospects of the rated company while simultaneously providing insights into short- and medium-term outcomes that lie on the critical path toward positive long-term outcomes.
6. Materiality: A rating should assess performance based on sustainability issues and indicators relevant to the decision-making of investors, and companies, consumers and other stakeholders for which a rating is designed.
7. Value Chain: A rating should apply to all portions of a rated company’s value chain over which the company exercises control or significant influence.
8. Assurability: A rating should be designed to allow for independent, third-party assurance of its application in accordance with the GISR standard by qualified parties.
9. Continuous Improvement: Through periodic update, a rating should track and integrate the best-available science and measurement techniques, issues, and indicators.
10. Impartiality: The design and application of a rating, whose primary users are external to the rated organization, should be protected from undue influence by the rated company.
11. Inclusiveness: Development and stewardship of a rating should identify and systematically engage those stakeholders whose decisions are influenced by the application of the rating.
12. Transparency: A rating should be transparent to those whose decisions are affected by the application of such rating.

Published to coincide with the release of President Barack Obama's budget plan, which includes a series of measures designed to drive low-carbon investment, the "Climate Declaration" was backed by a host of high-profile brands, such as Adidas, Ben & Jerry's, Ikea, L'Oreal, Nestle, Nike, Starbucks and Unilever, as well as a number of leading technology firms, including CA, Ebay, EMC and Intel.

The declaration, orchestrated by the Business for Innovative Climate & Energy Policy (BICEP) group, argues that a wide range of economic benefits may be realized from taking ambitious action to tackle climate change risks.

"In doing this right, by saving money when we use less electricity, by driving a more efficient car, by choosing clean energy, by inventing new technologies that other countries buy and creating jobs here at home, we will maintain our way of life and remain a true superpower in a competitive world," the statement reads. "In order to make this happen, however, there must be a coordinated effort to combat climate change."

The statement also criticizes climate sceptic groups seeking to undermine the green economy, arguing that "we cannot risk our kids' futures on the false hope that the vast majority of scientists are wrong."

"The signers of the Climate Declaration have a clear message for Washington: Act on climate change," said Anne Kelly, director of BICEP, in a statement. "We are, and it's good for our businesses. The cost of inaction is too high. Policymakers should see climate change policy for what it is: an economic opportunity."

Her comments were echoed by Eileen Fisher, chief executive of the apparel firm of the same name and a signatory to the declaration, who warned businesses already faced climate-related costs.

"From droughts that affect cotton crops to Hurricane Sandy, which caused extensive damage to our operations, climate affects all aspects of our business," she said. "As a socially and environmentally responsible company, we are trying to affect positive change, but business can't do it alone. We need the support of strong climate legislation."

BICEP is calling on other companies and individuals to sign up to the declaration.

The high-profile declaration comes just a week after Obama used a fundraiser event in California to call on businesses and green groups to do more to make it clear that "this notion that there's a contradiction between our economy and our environment is a false choice."

It also came as the White House released its long-awaited budget plan for fiscal 2014, featuring a host of measures designed to significantly increase low-carbon investment.

The budget includes a series of spending cuts and tax increases designed to bring down the U.S. deficit to 2.8 percent of GDP by 2016 and 1.7 percent by 2023. But one area that would see a significant increase in spending is the green economy, with the budget mapping out plans to repeal up to $4 billion of fossil fuel industry tax breaks and use some of the money to increase clean tech spending by 40 percent.

The budget has little chance of being approved in its current form given fierce Republican opposition in the House of Representatives. But the high-profile support for the green economy is seen as a negotiating gambit designed to protect a wide range of clean tech funding programmes.

Under the budget proposal, the Department of Energy would see an 8 percent increase in its budget for 2014 to $28.4 billion, enabling a 24 percent increase in government support for biofuel programmes, a 5.7 percent increase in basic science research and a 29 percent increase in spending on renewable energy grid connections.

It also would confirm the popular Production Tax Credit for renewable energy projects indefinitely, removing the need for annual Congressional approval for the incentives, and enable Obama's proposal for a $200 million Energy Security Trust to fund research into more fuel efficient and zero emission vehicles.

In addition, it outlines plans for a $200 million funding competition to encourage state governments to invest in energy efficiency programs and provide new funding to help communities protect themselves from climate change impacts.

This article is reprinted with permission from BusinessGreen.

US companies are flipping the script: instead of lobbying government to relax (or even gut) environmental regulation, a corporate group is urging Washington to enact strong policy aimed at curbing climate change. Their climate declaration, in addition to making an eco-appeal to the scientific consensus that excessive carbon emissions cause climate change, also makes a clear-eyed business case. "Tackling climate change is one of America's greatest economic opportunities of the 21st century," it says.

"The cost of inaction is too high," says Anne Kelly, director of Business for Innovative Climate and Energy Policy (Bicep), a project of Ceres, the Boston-based nonprofit network of investors and companies that advocate for sustainable prosperity. "Policymakers should see climate change policy for what it is: an economic opportunity."

Economic opportunity? The 33 signatory companies, who already integrate climate management into their policies and practices, believe so. They're wagering that the business-as-usual economy, which benefits from society footing the bill for companies externalising pollution, is already on the way out of the door. The future portends a carbon-constrained economy that prices greenhouse gas emissions.

These companies – which include Unilever, Nestlé, Swiss Re, Intel, Nike, and Starbucks – are already preparing for a carbon tax (or similar pricing mechanism) by embracing clean energy, boosting efficiency, and limiting carbon emissions. And now, they're calling on Congress to enshrine such practices in lawbooks. They think the cost-benefit analysis favours their approach. For example, a recent Pew study forecasts 8% compounded growth annually of revenue linked to developing renewable power. On the cost side, climate disruptions – such as increasingly intense superstorms, heat waves, droughts, and rising seas – are already creating significant risk for corporate bottom lines and investment portfolios.

"From droughts that affect cotton crops to Hurricane Sandy, which caused extensive damage to our operations, climate affects all aspects of our business," says Eileen Fisher, CEO of whose operations were halted by the 2012 storm.

"As a socially and environmentally responsible company, we are trying to affect positive change, but business can't do it alone. We need the support of strong climate legislation."

The declaration is taking a grassroots approach, encouraging other companies – as well as individuals – to sign on, as a means of documenting the kind of broad support needed to convince legislators to act. Indeed, a recent New Yorker piece pinned the 2010 failure of cap-and-trade legislation in the US on the top-down tactics of the environmentalist community, which departed from the movement's bottom-up roots.

Belief in global warming has shifted back into the majority in the US,according to data news site, Gallup, with even stronger popular support for strong governmental action to combat climate change, according to a Yale/George Mason University survey. The climate declaration seeks to crowdsource this popular energy to create change from atop the legislative food chain.

Some companies, impatient with government inaction, are introducing their own carbon taxes. Disney, Microsoft, and Shell, for example, have enacted self-imposed carbon taxes internally, to prepare for what they see as inevitable legislation heading in that direction. Similarly, many Bicep companies are acting to address climate change in advance of legal mandates, for example by reducing their carbon emissions.

EMC sets the gold standard on this front, having set carbon emissions targets that align with scientific climate stabilisation models – which the Carbon Disclosure Project recommends in its Carbon chasm report that all companies do.

Ben & Jerry's was the first company to base its carbon target on scientific climate stabilisation scenarios in 2006 – yet it's parent company, Unilever (also declaration signatory), has yet to embrace this method. The climate ceclaration would resonate stronger if all Bicep companies walked this talk.

However, this low walk/talk ratio exposes the very chicken-and-egg dilemma companies face when addressing climate change, underscoring the urgency of the declaration.

First-movers risk absorbing the costs of early action, while free riders jump on the bandwagon after the risks has been mitigated. Legislation and regulation levels the playing field. With this in mind, the more companies and individuals who sign the declaration, the stronger the message to US senators to enact strong climate legislation (including bills currently in the pipeline) — and thereby set examples for other governments to follow suit.

The innovations of the past century have helped drive growth and improve the livelihoods of many millions of people, but the result is a long way from a sustainable society. In fact, the world is now on track to warm by four degrees Celsius by the end of this century, which will have a severe effect on weather patterns, water availability and agriculture.

Over the past year, we have already seen these changes manifest themselves in the strong storms, drought and other extreme weather that have swept the United States. Climate change is a reality, and it requires a strong response from individuals, businesses and policymakers alike.

We can’t ignore this challenge. To maintain our way of life and improve our economy, we must tackle it. That’s why IKEA has joined 33 American business leaders in signing the Climate Declaration, a call to action for U.S. policymakers to seize the economic opportunities of addressing climate change.

Coordinated by Ceres and its Business for Innovative Climate and Energy Policy (BICEP) coalition, the Declaration is framed around a single statement: “Tackling climate change is one of America’s greatest economic opportunities of the 21st century.” Each of the Declaration signatories of has taken steps to limit our impact on the climate, and we see clear benefits to our businesses. At IKEA we not only agree with the sentiment; we also agree in practice. We call our approach People & Planet Positive.

IKEA has always been extremely economical in our use of resources, and the reason is that in order to deliver low prices, we have to be efficient. IKEA is currently the second largest private commercial solar owner-user in the U.S. and is in the midst of investing $150 million in photovoltaic solar power systems, which will eventually cover 39 of 44 store and non-store locations across the country.

We also know we can help our customers save money — and energy — through better product design. By switching over to LED lights in our lamps and selling only LED bulbs, we found we can reduce our customers’ operating expenses by 30 percent. And we can help people save water in a meaningful way through more efficient fixtures and appliances.

Policymakers also have the same opportunity to put money back in people’s pockets and create even greater benefits for citizens and the climate. They should embrace it.

So what can government leaders do to address climate change? As some political leaders already have, they can start by looking to the business world for inspiration.

The very same policies that can move the needle on climate change — improving energy efficiency, investing in clean energy, putting a stop to harmful emissions — are the hallmarks of good management at companies across America. And these internal policies are not breaking the backs of businesses; they’re making them stronger. As IKEA has whittled away at our carbon footprint, our global comp sales grew 4.6% (last fiscal year) and our global workforce grew to 139,000.

To address climate change, Congress should take a note from corporate America, because even if concerns about sustainability or climate change are put to one side, being careful with resources, managing costs for the future, controlling energy use and looking after your people is good for business.

And that’s a message the business world should be proud to declare.

Climate change and extreme weather are fundamentally changing the United States, and American taxpayers are paying a huge, and growing, cost.

The U.S. Government Accountability Office warned in February that climate change is a "significant financial risk to the federal government." It threatens everything — not just federal lands and buildings, but food, flood and crop insurance, and disaster relief.

And who pays for all of this? We do, the American taxpayers — a threat to the government's wallet is a threat to our own bottom line. Here are several examples of the escalating costs Americans are already bearing.

Food

Taxpayers subsidize the federal crop insurance program that was created during the 1930s Dust Bowl to protect farmers against crop losses. Today, we're experiencing another devastating drought, and federal crop insurance losses have tripled in the past three years to $16 billion in payouts for 2012. That's a cost of $51 a year for every man, woman and child in America.

And these costs are likely to continue — the latest numbers from the U.S. Drought Monitor show nearly 67 percent of the contiguous U.S. is now experiencing some level of drought.

Floods

The National Flood Insurance Program (NFIP) is staggering under massive losses after Superstorm Sandy, which triggered more than 115,000 new claims in just the first two weeks after the storm.

Although NFIP collects about $3.5 billion a year in premiums, the amount of claims the agency has paid out has exceeded the amount collected in four of the past eight years, leading to increased borrowing by the federal government (in other words, taxpayers) to fill the gap. Last year's losses in Sandy's wake are expected to approach $8 billion. That's $25 for every American. [How Sandy Compares to the Worst US Natural Disasters]

Keep in mind, that figure doesn't even include the $50 billion of disaster relief that Congress approved in January for Sandy-impacted states. And with sea levels rising and storm surges reaching further inland because of climate change, risks to coastal communities and costs to taxpayers will continue to rise.

Fires

While Eastern states flood, many Western states are going up in flames. In 2012, more than nine million acres burned in wildfires — an area larger than the state of Maryland — making it the third-worst fire year in U.S. history.

In 2012, the Forest Service overspent its available fire suppression budget by $400 million, as it has almost every year for the last 20 years, transferring millions of dollars away from other land management projects. The costs are not only borne by the federal government; Wyoming and Montana spent more than $90 million of state money fighting wildfires in 2012. [Is Global Warming Fueling Colorado Wildfires?]

Climate models show a likely increase in fires in coming years, and a study by Headwaters Economics found that even a 1-degree rise in temperatures would likely lead to a 300 percent increase in acres burned and a 100 percent increase in fire-suppression costs.

State taxpayer exposure

Extreme weather, influenced by climate change, creates other taxpayer risks. State governments are increasingly liable for the cost of hurricane damages as private insurers pull out of at-risk locations, leaving state taxpayers subsidizing insurance loss claims for homes and businesses.

The state insurer in Florida, for example, is carrying the burden of more than one million homeowners' policies — a financial catastrophe just waiting for state taxpayers the next time a major hurricane hits Florida. State government-loss exposure in hurricane-prone states (such as Florida, Texas and Massachusetts) now exceeds $885 billion, a 16-fold jump from 1990.

Those trends are chilling reminders of the sweeping economic impacts we are now all facing from warming global temperatures. As you pay your taxes on April 15, you should also consider what your political leaders — in Washington and your state capital — are doing to address climate change. Let's hope, for your wallet's sake, they're tackling the issue head-on.

Click to hear the interview.

Hugh Welsh heads the North American operation of the Dutch life sciences company DSM. The company makes everything from plastics, to biomedical devices, to nutritional supplements. And like most corporate executives these days, Welsh get a bonus for meeting certain performance goals.

But some of those goals wouldn’t show up in most corporate reports, for instance, progress toward the company’s goal of lowering greenhouse gas emissions by 25 percent within a decade.

“So each year, there would be a target set for that annualized greenhouse gas emission reduction and that must be met or I don’t get that portion of my bonus,” said Welsh.

In fact, for the past two years, a third of Welsh’s bonus has depended on meeting greenhouse gas targets, as well as targets for using less water and energy. The company has taken on projects ranging from installing solar farms on its properties to returning to natural landscaping to cut back on water and fertilizer usage.

Using less energy and water saves the company money right now. And Welsh said they’re also concerned about the growing number of severe weather events linked to climate change, such as last year’s major US drought and hurricane Sandy.

“Those have adverse impacts on our businesses and would have more severe adverse impacts on our businesses down the road. So whatever we can do to mitigate that, we see as good business,” said Welsh.

And, by extension, Welsh said the company sees it as good for the environment as well.

“Let’s be clear, when people get compensated for something, they make sure it gets done well,” said Mindy Lubber, the CEO of Ceres, a Boston-based nonprofit that helps companies deal with sustainability issues.

“If we want to truly integrate sustainability into companies, not as an after-thought, not as a small niche program, but as a core part of what that company needs to be doing, several things need to happen. They need to set goals around sustainability, and, like they do with other important things, they need to tie those goals to compensation.”

But linking compensation to environmental measures still isn’t all that common, perhaps in part because companies have to spend more money upfront to save money and protect the environment in the long-run. CERES polled 600 multinationals and found only 7 percent doing it.

Lubber said European companies, like DSM, are leading the way.

“We know that sustainability is an ethic in Europe, is embedded in people’s lives from the time they are born. Not so much in the United States I’m embarrassed to say. And it’s the same with companies.”

European companies also have to deal with more environmental regulations. And that pushes them to innovate, said Paul Simpson, the CEO of CDP, a London-based global not-for-profit organization that helps companies and cities measure the financial impacts of environmental policies.

Simpson also likes the idea of tying bonuses to environmental goals. But he said to truly be effective, the tactic has to be integrated across an entire company.

“Historically, you might have had big businesses with 100,000 employees having two people work on (the) environment, right? That’s not going to get you very far. If you want to really embed this in your business, you’ve got to get some or all of your staff to take it seriously, and therefore providing these incentives makes complete sense. If you can change your staff, you can realize the benefits of sustainability far quicker in the business.”

And Simpson said there’s increasing evidence that companies that are leading on measures of sustainability are also doing well financially.

“The financial community is very interested: Is that because it’s a proxy for good management? So a well-managed company will be delivering better returns and of course addressing sustainability. Or are there also fundamental factors, like the company is more energy efficient? Or it’s got a better innovation process and better product portfolio to attract more clients?”

Whatever the reason for the success of these companies, Welsh, and Mindy Lubber, said the trend of tying bonuses to environmental measures is slowly catching on, particularly with multinationals. But resistance among many executives may be hard to shake. After all, as Hugh Welsh with DSM knows all too well: You need to perform to get paid.

“(Last year) we met other metrics with respect to water usage and energy usage, but our greenhouse gas emission metric was not met, so that portion of my bonus I did not get,” Welsh said. “That’s the way it goes, but I guess we’ll redouble our efforts to get there this year.”

Of 184 companies surveyed, only 23 had such strategies, and 13 of those that did were foreign-owned, according to report by Ceres, a Boston-based non-profit that promotes eco-minded business practices. The report says the most prepared tend to be the largest companies with scientists on staff and those that insure property rather than life or health.

Many companies "won't talk about climate change" and if they do, they use "hedged" language to avoid the controversial issue of whether it's man-made, says author Sharlene Leurig, senior manager of Ceres' insurance program. She says the issue is less politically divisive in Europe, where insurers are often better prepared.

The report comes as weather-related disasters cost an estimated $100 billion in damages last year, and the U.S. government's latest National Climate Assessment says climate change increases the risks and severity of of heat waves, downpours, droughts and wildfires as well as the intensity of hurricanes.

The report's findings are based on responses by insurers doing at least $300 million worth of business in California, New York and Washington — states that mandate they participate in a survey to disclose their plans. Ceres evaluated the companies for how seriously they study climate-related risks and take steps to reduce them, such as lowering their own and their clients' energy use and greenhouse gas emissions.

Others say the insurance industry is stepping up to the challenge. It's made 1,148 efforts to adapt and mitigate climate change, according to a study released in December by Evan Mills, a scientist at the federally-funded Lawrence Berkeley National Laboratory. He said insurers have introduced at least 130 energy-efficient products and services and paid claims encouraging their use in rebuilding after a loss.

Leurig says Mills looked at the largest global insurers while her study evaluated both large and smaller companies working in the United States. Still, the industry says it's ready.

"They (insurers and re-insurers) have been dealing with climate variability and volatility in every corner of the globe for decades," says Robert Hartwig,president of the Insurance Information Institute, a trade group. "The industry globally has never been stronger, despite record catastrophic losses in recent years."

Hartwig says the industry had no trouble covering the 1.5 million claims worth an estimated $25 billion in damage from Superstorm Sandy last year. He says smaller insurers are no less prepared, because they can access the scientific expertise of their brokers and re-insurers.

Washington's Insurance Commissioner Mike Kreidler agrees the industry is now financially solid but says it can do more to prepare. He cites its efforts to boost auto safety by advocating seat belts and air bags. He says it could do the same with climate change by encouraging people to build more resilient structures in less risky areas.

Kreidler says he worries that insurers will react to major losses by boosting premiums, adding exclusions or pulling out of devastated areas, leaving communities without coverage or taxpayers with the tab. He says climate change can be that kind of "game-changer."