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Deutsche Bank, Investors Seek Climate Change Action

By Steve Geimann, Larry Liebert
San Francisco Chronicle
Deutsche Bank AG and the California Public Employees' Retirement System are among 259 investors urging policy makers to combat global warming or face mounting economic disruptions in the next 40 years. Losses stemming from climate change may trim as much as 20 percent from global economic output by 2050, according to a statement from Ceres, a coalition that joined investors holding $15 trillion in assets in seeking action.


Deutsche Bank AG and the California Public Employees’ Retirement System are among 259 investors urging policy makers to combat global warming or face mounting economic disruptions in the next 40 years.

Losses stemming from climate change may trim as much as 20 percent from global economic output by 2050, according to a statement from Ceres, a coalition that joined investors holding $15 trillion in assets in seeking action. Frankfurt-based Deutsche Bank is Germany’s largest bank and Calpers, based in Sacramento, California, is the biggest U.S. public-pension fund.

Countries must set a price on carbon-dioxide pollution, cut emissions, adapt to climate change and embrace policies to spur use of renewable energy, according to the group. Investors said the U.S. Congress’s failure to pass legislation limiting greenhouse-gas emissions makes it unlikely negotiators will agree on a global climate-change treaty during talks in Cancun, Mexico, this month.

“Investors need greater policy certainty from governments,” Donald MacDonald, trustee for BT Pension Scheme, the U.K.’s largest employee pension plan, said today in a statement. “Deferring climate-change agreement adds to investor concerns that climate-change risks and costs aren’t taken seriously.”

Negotiators at the United Nations-led talks in Cancun should establish a plan for the funding needed from rich countries to help poor nations deal with the affects of higher temperatures and rising sea levels, the group said. Investors seeking action include Deutsche Bank’s climate-change unit, and Zurich-based Swiss Reinsurance Co., the world’s second-largest reinsurer behind Munich Re.

Copenhagen Accord

The U.S. and industrialized economies agreed last year in Copenhagen to provide $30 billion from 2010 to 2012 and as much as $100 billion a year from public and private sources by 2020.

The group blamed the U.S. and a deadlock in the Senate on legislation to cap carbon emissions in part for the lack of progress in the international talks.

“Climate change may be out of vogue in Washington today, but it poses serious financial risks that aren’t going away and will only increase the longer we delay enacting sensible policies to transition to a low-carbon economy,” said Jack Ehnes, chief executive officer of the Sacramento-based California State Teachers’ Retirement System, the second-largest U.S. public-pension fund.

North American Lagging

North America is lagging behind Europe and Asia in clean- energy investing, Ceres, a Boston-based coalition of investors and environmental groups, said today in a news release on the investor statement. The U.S. supported $20.7 billion in renewable energy projects last year while Europe backed $43.7 billion and Asia $40.8 billion, Ceres said, citing a UN report.

Global clean-energy investments are expected to exceed $200 billion this year, according to the coalition. Bloomberg New Energy Finance and the World Economic Forum have said about $500 billion is needed annually by 2020 to hold worldwide temperature increases to 2 degrees Celsius (3.6 degrees Fahrenheit) higher than in pre-industrial times, Ceres said.

“Current investment levels fall well short of what is needed to stem the rise of global temperatures and adapt to a warming world,” Mindy Lubber, president of Ceres, said today.

Major polluting countries including the U.S. and China agreed in July 2009 to cap average global temperature increase to 2 degrees to stave off the worst effects of global warming.

The UN climate-change meeting in Cancun is set to take place from Nov. 29 through Dec. 10.

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