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.

Pension funds, governments and private institutional investors are beginning to ask asset managers to include climate risk in their due diligence, according to the report. U.S. regulators are trying to make it easier for shareholders to seek information on environmental risks, and are giving “serious consideration” to requiring that companies disclose more about how global warming may hurt profits, Ceres said.

“The subprime meltdown was about ignoring risk,” Mindy Lubber, president of Boston-based Ceres, said in an interview. “We're at the early stages of integrating climate risk and other sustainability risk into financial management.”

Efforts to stem climate change may increase costs for companies that emit high levels of carbon dioxide, such as utilities and oil refiners, said Alexis Krajeski, associate director of governance and sustainable investment at F&C Asset Management Plc, which oversees the oldest U.K. investment fund. Krajeski meets with officials from corporations such as Irving, Texas-based Exxon Mobil Corp., the biggest U.S. oil company, to help formulate strategies to respond to global warming.

Role to Play

“Have they estimated where climate change will impact their business most significantly?” Krajeski said in an interview. “As an owner, we have a role to play in encouraging the company to prepare.”

Developed nations must cut emissions 25 percent to 40 percent from 1990 levels by 2020 to “stand a chance” of keeping the global temperature within 2 degrees Celsius (3.6 degrees Fahrenheit) of pre-industrial times, the United Nations Intergovernmental Panel on Climate Change has said.

Without curbs, temperatures could rise by 6 degrees Celsius, an increase that “would lead almost certainly lead to massive climatic change,” the International Energy Agency, an adviser to 28 oil-consuming nations, said in a report.

Ceres sent questions to the 500 managers overseeing the most assets, as listed by the 2008 Pensions and Investments Survey. Eighty-four with $8.6 trillion under management completed the questionnaire.

‘Significant Exposure'

Of those responding, 71 percent said they don't assess climate risk when they aren't marketing an environmentally sensitive fund, according to the report. While half of the money managers said some industries have “significant exposure” to climate risks, 47 percent of those said they don't analyze climate risks or opportunities.

In October, the Securities and Exchange Commission issued guidance that will make it easier for investors to seek information on climate-change risks through shareholder resolutions, according to the report. Lubber said she expects action soon on a request to the SEC for guidance on how companies should disclose the information.

The U.S. Congress is debating legislation that would cap carbon dioxide emissions from utilities, refineries and manufacturers. Action from the SEC and Congress will send “honest market signals” that will change company behavior, Lubber said.

“As soon as we see robust disclosure, we're going to see this reflected in share prices,” Lubber said.

Nearly half of the asset managers surveyed, or 44 percent, said they don't consider emerging climate risks a financial threat to their clients' money. That means many managers are failing to see long-term hazards to corporate supply chains, shuffling competitive landscapes, and diminishing resources like water, according to a report commissioned by Ceres, a group of institutional investors and environmentalists.

In practice, that number is likely higher. Seventy-one percent of respondents said they don't calculate climate risks when developing traditional investments, versus a "green fund." Those managers oversee assets amounting to $4.5 trillion.

"This perspective is disappointing," said Mindy Lubber, the group's president. "What this survey shows is that most money managers are ignoring significant 'hidden risks' in the trillions of dollars of investments they have a fiduciary duty to be managing."

Part of the problem is the long timeline over which climate change will occur. The analysis found that some money managers looked only a few years into the future when choosing stocks. They tended not to put a high priority on climate risks, apart from quick-hitting threats like new regulations.

Others, however, believe the value of investments will diminish over time if a company isn't adapting now to cope with long-range competitive issues, energy transformations, fewer resources and physical climatic thrashings.

Don't ask, don't tell

Greg Horn, with Pegasus Capital Advisors, said managers who fail to factor environmental elements into their investment decisions are vulnerable to a "blind side" blow. He was surprised by the report's results.

"As [natural resources] become more precious, more valuable, because there's more demand on them, businesses will use them more efficiently," said Horn, who did not participate in the survey. "Businesses that aren't in those categories now are getting beaten in the marketplace."

Disbelief in climate change isn't always the reason behind inaction. Half of the surveyed money managers believe that significant risks are bearing down on a spectrum of sectors, especially utilities, power producers, manufacturing and the automobile industry. But 47 percent of those concerned managers don't incorporate an analysis of climate risks and opportunities into their due diligence process.

One reason for this is that they weren't asked to. Nearly half, or 49 percent, of respondents said investors do not ask them to look at corporate climate risks.

"A key problem identified in the report is that asset owners, such as pension funds, governments, and other private institutional investors, are only just beginning to ask their asset managers to include climate risk and opportunity analysis in their investment due diligence," the report says.

Pushing the envelope on 'due diligence'

The survey was sent to the 500 largest asset managers listed in Pensions & Investments, and was also made available to others who heard about it through the Internet or Ceres newsletters and staff. Eighty-four managers handling $8.6 trillion responded. The survey was conducted between November 2008 and January 2009.

It comes as more pressure is being placed on institutional investors to avoid assets endangered by climate change. Corporate critics often complain that environmentalists are pushing them to be politically active in the climate debate by withholding large investments from utilities and other carbon-heavy sectors.

Insurance regulators, on a related front, will issue the nation's first mandatory climate regulation this spring. The "climate risk survey" asks several questions about what steps insurers are taking to safeguard their massive investments from emerging climate dangers.

With Ceres focusing on asset managers, the group is highlighting another layer in the financial framework that it says is reacting too slowly to the hazards at hand.

"But the vast majority of the asset managers who responded to the survey are only in first gear on climate change," Lubber said. "Most are in the preliminary stages of including climate risk in their due diligence, but very, very few are considering the broad range of climate risks in their company evaluations, including physical, regulatory, litigation and competitive risks."

"It's incredibly important that those things happen," Stern said, speaking before an audience of Wall Street and institutional investors meeting at the U.N. headquarters in New York.

In his first public comments since returning from the U.N. climate summit last month in Copenhagen, Stern sought to dispel notions that the resulting three-page, nonbinding agreement was a failure. He also said the Obama administration fully intends to press ahead with energy and climate legislation designed to reduce U.S. emissions, though he did not endorse a particular approach such as a cap-and-trade program.

"There will be a significant effort on the part of all in the administration to press forward," he said. "The president is focused on it, and the White House is focused on it."

Under the accord, major industrialized and developing countries are supposed to submit emissions-reduction targets by Jan. 31. Stern said getting that on paper, alongside an agreement from China and other countries to allow some form of international inspection of the progress in making those reductions, should be considered a significant achievement.

Confidence that emissions reductions promised by major emitters can be verified, particularly in the United States, China and India, led President Obama's agenda once he arrived on the final day of negotiations.

"That was the single biggest personal focus for President Obama," he said.

Chinese officials resisted measures that could subject their economy to international oversight, despite the strong preference by the United States and European Union to have some level of guaranteed transparency built into any binding or nonbinding agreement.

In the debriefing before major private-sector investors concerned about climate change and uncertainty about global energy policies, Stern said Secretary of State Hillary Rodham Clinton shifted the dynamic of the failing talks late in the two-week summit by committing the United States to $100 billion a year in financing for poor nations by 2020. The accord included a fast-track plan to build a $30 billion fund in three years.

"It did really include significant breakthroughs," Stern said, noting that it was the first time so many national leaders sat together to hammer out a deal -- despite its near collapse. "You can't underestimate the breach in the firewall between developed and developing countries."

Over 450 investors controlling $13tn of assets yesterday urged world governments to pre-empt an international climate change treaty and take immediate action on global warming, or risk losing the opportunity to establish a clean and sustainable low-carbon economy.

At a conference at the United Nations in New York, the first gathering of business leaders since the disappointment of last month's Copenhagen climate summit said governments — even in the absence of a treaty — must adopt policies that give a clear sense of direction towards a new clean energy economy. Copenhagen made only "incremental" progress, the investors said in a statement and governments worldwide needed to act now to reset their domestic agendas, with policies to limit greenhouse gas emissions and to lay the foundations of a carbon market.

"Given that Copenhagen was a missed opportunity to create one fully functional international carbon market, it is more important than ever that individual governments implement regional and domestic policy change to stimulate the creation of a low carbon economy," said Peter Dunsombe, chairman of the IIGCC, a network of European investors. "Leaders from both developed and developing countries need to act now to compensate for the lack of progress."

The Obama administration, like other governments of industrialised countries, has acknowledged the private sector will provide the majority of funding for the transition from fossil fuels to renewable, low-carbon energy sources.

"Investors remain committed to taking action," the group of 450 investors from Europe, America and Australia said. "But for us to deploy capital at the scale needed to truly catalyse a low-carbon economy, policy makers must act swiftly." Before the Copenhagen conference, the economist Lord Stern, and the head of the UN Environment Programme Achim Steiner, told the Guardian that a failure would be "very damaging" to investor confidence.

The cautious assessment on the outcome of the Copenhagen climate change summit was echoed by the Obama administration's top climate change envoy, Todd Stern. He told the conference, which was organised by the Ceres green investment network, thathis year would be crucial in determining whether the world was truly on course towards reaching a fully fledged treaty to deal with climate change.

He said America and other countries would be working hard to flesh out a 12-paragraph accord brokered by Obama and the leaders of China, India, Brazil, and South Africa, especially on sharing of clean energy technology, and the mobilising of a global fund to help poor countries adapt to climate change. "We have an accord that is lumbering down the runway, and we need to get it enough speed so that it can take off," Stern said.

The investors said it was critical that governments – including the US – adopt rigorous targets for reducing greenhouse gas emissions over the next decade as well as for the distant date of 2050. In addition to renewable energy, they also called for policies to speed the development of green building practices, cleaner cars and public transit systems.

"What we need most is government action both in the US and throughout the world," said Anne Stausboll, the chief executive of the California Public Employees Retirement System (Calpers) America's largest public pension fund. Calpers has $1bn of its $205bn assets in green investment, and was ready to do more, but Stausboll — like others — said that Congress first needed to put in place a climate change law.

Though President Barack Obama's on-the-ground diplomacy on the final day of the summit produced what came to be called the Copenhagen Accord, there are more than a few environmentalists who believe the conference was a failure. That may be going too far. A three-page, nonbinding agreement that wasn't fully accepted by all of the nations in attendance may be a diplomatically flimsy thing, but it does hold real promise. Major developed and developing countries agreed that by Jan. 31 they will submit their emissions-reduction plans — plans that will be crucial in pushing the world down a low-carbon path. If there's a secret weapon buried in the accord, it's this: governments will not act alone but will vigorously engage the business world. "We can only meet this challenge," says Stern, "if we can generate sustained, long-term investment in the clean-energy economy." (See the top 10 green ideas of 2009.)

That was the main message behind the one-day Investor Summit on Climate Risk at the U.N. on Jan. 14. The event connected green luminaries like Al Gore with the unfamous people who direct hundreds of billions in private investment. This was the fourth annual summit, but it may have been the most fortuitously timed of the lot — occurring after Copenhagen, before the U.S. Senate begins its real work on climate legislation this year and just as investors begin to climb out of the recession. The feeling at the session was hopeful — investors, especially large-scale institutional funds that need to worry about the long term, are ready to bet on cutting carbon — but impatient. The key, as many of them see it, is a policy that would make carbon more expensive, leveling the playing field so that competing technologies like wind and solar can gain traction.

"We had a good start at Copenhagen, but we're still without a very clear goal, without clear carbon caps, without a price on carbon," says Mindy Lubber, president of Ceres, a national network of major institutional investors and public-interest groups. "The private sector is ready to rock and roll." (See pictures of the effects of global warming.)

It had better be. The International Energy Agency estimates that more than $10 trillion in investment will be needed over the next 20 years to support a global transition to a lower-carbon economy. We're nowhere near that — Lubber says that $140 billion was invested globally in renewable and low-carbon technologies last year, a number that she estimates will rise to $190 billion this year. "Those are significant numbers, but it's not enough," she says.

What's needed? At the U.N. on Thursday, institutional investors from the U.S., Europe and Australia who represent more than $13 trillion in assets called for Congress and other policymakers to take swift action, principally through a cap-and-trade bill, which would limit the amount of carbon industry can produce and allow manufacturers to buy and swap credits, so that those who come in under the limit can sell polluting permits to those who exceed it. It's speculative capitalism with a bright green tint. For the idea to work, the private-investment community needs TLC from government policy: transparency, longevity and certainty. "That's what investors are looking for," says Kevin Parker, global head of Deutsche Bank's asset-management division. "But they're not getting it at the global level." (See the top 10 scientific discoveries of 2009.)

Nor, for now, are they getting TLC in Washington. The House of Representatives has already passed a cap-and-trade bill, but the going will be tougher in the Senate, where supporters will need to get 60 votes to overcome a Republican filibuster. Already, conservative Democrats — especially from the coal-dependent states of the Midwest and South — have made noises about opposing a cap-and-trade bill or perhaps replacing it with a law that would include wider support for clean energy but without the price on carbon. That, however, might not be enough to kick-start scaled-up clean-energy investments. "Without a cap, you don't put a limit on the stuff that is doing us in," says Lubber. "This is only going to ramp up when there's a cap on carbon."

Stern, the U.S. climate envoy, was quick to reassure the audience at the U.N. that the Obama Administration remained behind a climate bill. "There will be a significant effort on the part of all in the Administration to press forward," he said. "The President is focused on it, and the White House is focused on it." Obama will have to be. As the exhausting experience at Copenhagen showed, climate policy is not for the faint of heart.

Some of the world's most powerful businesses have today called on world leaders gathered at the World Economic Forum in Davos to embrace the Copenhagen Accord and use it to spur a "race to the top" that would see national, state and municipal governments compete to take more ambitious action to tackle climate change.

A group of six international business groups - Climate Group, Business for Innovative Climate & Energy Policy (BICEP), Carbon Markets & Investors Association (CMIA), Clean Economy Network, Combat Climate Change (3C) and Copenhagen Climate Council - which together represent over 200 multinational firms, will today issue an open letter to world leaders demanding they deliver the "clarity and certainty" necessary to drive the transition to a low-carbon economy.

The letter will call on all governments to set ambitious medium and long-term emission-reduction targets; introduce market and financing mechanisms that incentivise businesses to invest in low-carbon activities; tighten links with businesses in order to better understand the compelling commercial case for action on climate change; and deliver a binding international climate change treaty by the end of this year.

"Smart business knows that taking climate action makes good business sense; it is prudent risk management and creates significant opportunities," said Steve Howard, chief executive of the Climate Group and Chair of the World Economic Forum's Global Agenda Council on Climate Change. "Because industry is the primary driver of jobs and economic growth – and also for cutting global emissions – governments must give business the right tools and incentives to do the job at the scale and speed we need to safeguard our future climate, security and economic prosperity."

The move comes just days after the Prince of Wales' Corporate Leaders Group on Climate Change issued a similar letter to EU leaders urging them to move to a more ambitious emission-reduction target for 2020 of a 30 per cent cut on 1990 levels.

It also arrives just days ahead of the 31 January deadline for governments to submit emission targets and climate change action plans to the annex included in the Copenhagen Accord that was brokered at last month's Copenhagen Summit.

The UN's top climate change official, Yvo De Boer, said last week that the 31 January cutoff was a "soft deadline" and that countries could submit their plans after the date.

However, it is still regarded as a major test of the Accord's effectiveness and a flurry of submissions are expected in the coming days as countries seek to formalise their support for the agreement.

Speaking to BusinessGreen.com, a spokeswoman for the Department of Energy and Climate Change said the EU was expected to submit its targets tomorrow, while the BASIC group of Brazil, India, China and South Africa has also signalled it will present action plans before the deadline.

She added that the US, Japan, Australia and other major emitters were also expected to submit targets by the end of the week that will be largely in line with the 2020 emission targets they announced ahead of the Copenhagen Summit.

"Most countries will make their move quite close to the deadline," she said. "We're also expecting a few groupings of countries to meet after the deadline and make submissions soon after."

Under the Accord – which was brokered in the frantic final hours of the Copenhagen Summit by the US and the BASIC countries, and was subsequently supported by the EU and other major emitters – signatories will commit to limiting global temperature rises to two degrees and agree to adhere to national emissions targets for industrialised nations and detailed climate action plans for developing countries.

While it was widely criticised by environmental groups as woefully unambitious, it is still likely to form the basis for on-going negotiations as countries attempt to deliver a legally binding climate change agreement at this year's UN climate change summit in Mexico in December.

Although the agency has long required companies to reveal possible financial or legal impacts from a variety of environmental challenges, it has never specifically cited climate change as bringing potentially significant business risks or rewards.

The S.E.C., on a party-line 3-2 vote, issued “interpretive guidance” to help companies decide when and whether to disclose matters related to climate change. The commission said that companies could be helped or hurt by climate-related lawsuits, business opportunities or legislation and should promptly disclose such potential impacts. Banks or insurance companies that invest in coastal property that could be affected by storms or rising seas, for example, should disclose such risks, the agency said.

Mary L. Schapiro, the S.E.C. chairwoman, who was appointed by President Obama, said that the commission was not creating new legal requirements for companies, nor did it intend to endorse any particular scientific or policy view of global warming. She said that including climate risks among other disclosures was a logical step.

“It is neither surprising nor especially remarkable for us to conclude that of course a company must consider whether potential legislation — whether that legislation concerns climate change or new licensing requirements — is likely to occur,” Ms. Schapiro said in her opening statement before Wednesday’s vote. “Similarly, a company must disclose the significant risks that it faces, whether those risks are due to increased competition or severe weather. These principles of materiality form the bedrock of our disclosure framework.”

The agency took the action in response to petitions from environmental and investor groups that wanted specific recognition of climate change as an important factor in the present and future business environment.

“We’re glad the S.E.C. is stepping up to the plate to protect investors,” said Anne Stausboll, chief executive of the California Public Employees Retirement System, the nation’s largest public pension fund and one of the parties that petitioned for the guidance. “Ensuring that investors are getting timely, material information on climate-related impacts, including regulatory and physical impacts, is absolutely essential. Investors have a fundamental right to know which companies are well positioned for the future and which are not.”

According to an S.E.C. staff paper, the new guidance urges companies to consider, for example, whether any new law or international treaty limiting carbon dioxide emissions might increase operating costs and prompt a disclosure requirement. A company might also be well positioned to take advantage of a new law mandating increased production of renewable electricity, again requiring disclosure.

The two Republicans on the commission voted against the proposal, while all three Democrats voted for it. Commissioner Kathleen L. Casey, a Republican appointed by former President George W. Bush, called the new guidance unnecessary because the agency already required extensive disclosure of environmental factors. She also said the decision was driven by the political motives of advocacy groups.

“I can only conclude that the purpose of this release is to place the imprimatur of the commission on the agenda of the social and environmental policy lobby, an agenda that falls outside of our expertise and beyond our fundamental mission of investor protection,” she said.

Ms. Casey said it made little sense to issue such guidance “at a time when the state of the science, law and policy relating to climate change appear to be increasingly in flux.”

Ms. Schapiro and the commission staff were careful to avoid expressing an opinion on the issue of global warming itself. Ms. Schapiro emphasized that “we are not opining on whether the world’s climate is changing; at what pace it might be changing; or due to what causes. Nothing that the commission does today should be construed as weighing in on those topics.”

Investor protection is exactly what the commission had in mind when it decided, by a 3-to-2 party-line vote, to add global warming to the list of material issues — plant closing, the sale of assets — that companies may have to discuss in their financial filings.

Mary Schapiro, the chairman, said the commission was not adding new “legal requirements” but simply offering guidance to help companies decide when and whether to discuss the potential impact of global warming on their operations and earnings.

It makes good sense to us that companies should disclose whether a new law or international treaty limiting greenhouse gas emissions is likely to require new investments or increase operating costs. A climate change law could also help companies that produce renewable fuels or environmentally friendly technologies, like wind turbines. That, too, should trigger disclosure.

The commission, which took pains to say that it was not expressing an opinion on whether the world’s climate was changing, has long required companies to reveal financial or legal impacts from other environmental challenges — potential liabilities under the Superfund law or the Clean Water Act, for instance. It has also been petitioned by investor groups and environmentalists to add climate change to the list of those challenges.

At the same time, ordinary stockholders and state insurance regulators have begun expressing increasing alarm about the potential cost of unchecked climate change for American businesses. The S.E.C. action is simply one more incentive for investors and managers to better understand the risks — and the opportunities — out there for publicly traded businesses.

But business trends change with the times, and today one that Sam Rayburn never heard of — climate change — presents a new major challenge to investors’ bottom lines.

Investors representing over $1 trillion in assets filed a petition in 2007 requesting that the U.S. Securities and Exchange Commission clarify the types of information public companies should be disclosing about material impacts from climate change. Investors with more than $5 trillion of holdings submitted letters supporting the petition.

That’s just what the SEC did last month in approving new climate-related interpretive guidance for corporate disclosure. It is exactly the kind of “be-prepared” posture that is its mandate. The commission acknowledged what many of us know: that climate change is here, that it is already affecting businesses and their prospects, and that the high-potential opportunities it represents are as much in need of disclosing as potential costs.

Climate change is already guiding decision-making on a massive scale. In the U.S., more than 1,000 cities and towns are carrying out reductions in greenhouse gases. Over two-dozen states have mandates for boosting renewable energy. Over 20 states have mandated greenhouse gas emissions reduction targets.

Companies that address these issues are swooping in to seize the opportunities these actions represent. That’s a positive thing for our economy, but also something material that investors need to know about.

As institutional investors we don’t legislate, but we do have an unwavering responsibility to make rigorous, prudent decisions about the investments we are entrusted with managing.

But analyses of the 10-K filings we depend on have repeatedly revealed widespread disclosure deficiencies. Studies relying on detailed qualitative reviews and sophisticated search engines examining thousands of filings show that disclosures of climate-related information are inadequate and inconsistent.

These disclosure weaknesses represent what investors should dread the most: hidden risk. This is risk that can and does implode in fund portfolios — like the risks deeply embedded in packages of subprime mortgages and credit default swaps that nearly took the world economy down. Digging out from that avoidable debacle will take many years and much pain, particularly for Main Street citizens who depend on functioning credit markets and value stability in 401(k)’s and other benefit funds.

Climate change risk should be different — and will be with a commitment to stay ahead of developments, and regulators like the SEC acting to improve disclosure.

Kopp is the Maryland state treasurer.

The skeptics say the snow disproves global warming. The believers say the snow proves extreme climate events associated with global warming. Both sides are being stupid about the cause and effects of climate change.

Climate is not the weather on any particular day, or week, or month. Climate is the accumulation of weather patterns over the course of years.

I know that we live in a world of Twitter feeds, blog reports, and real-time cable news, but immediacy has no place in climate talks. Hence, knee-jerk reactions to storms, disasters, and temperature readings -- whether you believe in climate change or not -- shouldn't be deemed credible evidence of much of anything.

Weather patterns over the course of years, sure. Temperature-rise over the course of decades, absolutely. But record snowfall on Capitol Hill over the last few days only means for sure that kids will be out of school and that more shovels and snowplows will be needed.

Extend that snow pattern over the next few years, however, and you can bet that school days will be altered and more plows and shovels will be ordered. That is called preparing for a likely scenario. And that is what both sides of the climate debate should be looking at: preparedness. In other words: risk.

The investor coalition Ceres, the financial services firm UBS AG (UBS 18.71, 0.00, 0.00%)  and financial data provider Bloomberg, released a report recently on the risk of water scarcity. Water is the biggest environmental crisis facing us today -- in the here and now. Businesses are realizing the importance of dealing with the water crisis, and that is what the report addressed.

The report ranked the water disclosure practices of 100 publicly traded companies in eight key sectors exposed to water-related risks. It showed that many companies are not including material water risks and performance data in their financial filings. Moreover, none of the 100 companies are providing comprehensive water data on their supply chains, an especially glaring omission given that the vast majority of many corporations' water footprint is in the supply chain, the report said. Read the full report here.

This type of risk, of course, has a direct effect on companies' bottom lines. More disclosure is being called for so companies and shareholders can be prepared for what is likely to come.

Other groups are assessing the risk of climate change on all sorts of things -- from the effects of potential sea level rise on coastal homes to increased costs of energy.

These are the types of discussions we should be having. Let's forget about talking from the science down and begin to take action from the ground up. Let's be prepared for worst-case scenarios.

I forget who said it, but "even if there is a one percent chance of something unimaginable happening," then we should be prepared for it.

Otherwise the only thing you can count on is a lot of talk and a lot of conjecture. And that is called a snow job in Washington, D.C.

Fresh from a whirlwind tour of non-stop meetings at the World Economic Forum in Davos and a U.N. investor summit on climate risk attended by George Soros, Al Gore, and 500 of the world's most powerful institutional and private investors, Mindy Lubber has a full plate.

Running around the globe promoting the cause of Ceres, she calls for corporations and financial communities to address the world's environmental and social challenges.

A leading nonprofit coalition of investors, environmental groups, and other public interest organisations, Ceres focuses on advancing sustainability and understanding of global climate change in capital markets.

Ceres also directs the Investor Network on Climate Risk, a network of over 80 institutional investors with collective assets of more than eight trillion dollars, who are dedicated to understanding the financial risks of climate change.

Earlier this month, a long-awaited victory: The U.S. Securities and Exchange Commission (SEC) took a significant step in a 3-to-2 vote calling for companies to reveal the implications of climate change on their firms.

The approved guidelines call for companies to consider the impact of climate change laws and regulations when deciding the type of information to reveal in corporate filings.

While the agency has called for environmental concerns to be disclosed to investors in the past, this is the first time that climate change was formally articulated as a risk by the SEC.

The SEC ruling was a response to investors who said that there was not enough information given by companies on the risks to their profits.

Speaking from her office in Boston, Lubber said that the ruling was many years in the making. Excerpts from the interview follow.

Q: Please explain the significance of the SEC decision to require corporate disclosure on climate change risks and opportunities.

A: The SEC ruling affirms that climate change is a material risk that companies need to pay attention to. In many ways nobody was asking for new rules or laws but an affirmation by the SEC.

This is really part of a big picture. For years there was an idea that environment was a boutique issue, and economic issues were the big ones. But now things are becoming different and there is a coming to grips that sustainability issues are economic issues.

For example, think about water shortages. There is not enough water to feed plants, but also to run business systems. We are 6.2 billion people on this planet - we are in a deficit related to our natural resources. We do not have resources for the eventual 9.0 billion people - people with cars and dishwashers. We cannot build a middle class around the world this way.

We have to look at how to build an economy with limited resources. The conversation in total has changed. It is about integrating sustainability into capital markets. How do you make it into reality? One way is to change the way companies do business and the way investors evaluate.

One way to drive that is if there is a material risk, and something has an impact on the strength of a company, then it has to be disclosed in the financial statements. For example, if a product uses uranium but there is a strike of miners in Nicaragua, then the company should know. Legal filings are needed.

Q: What kind of work did it involve to have this adopted?

A: More than a dozen investors managing over a trillion dollars in assets requested formal guidance in a 90-page petition filed [with] the SEC in 2007, and supported by supplemental petitions filed in 2008 and 2009. The SEC brought investors who handle four trillion dollars in to see them.

The commissioners were open to engaging people of all opinions. We know that they talked to others who said climate change wasn't a material risk. They read the petition, and invited us in with other investors and after a year of deliberations they determined this was an issue that investors had a right to understand. They agreed to act on it. It took years of educating and working with investors.

Along with investors' petitions, in the past year we got real traction rather than deafening silence. We published studies along the way - lengthy 100-page studies - and looked at all the filings at the SEC and not shockingly we found that some companies did or did not look at climate risk. There was a need for consistency.

Q: Why is this decision ground-breaking, and what do you say to critics who have said it is not remarkable?

A: It depends on how you look at it. In some ways it is no big deal in that the SEC exists to protect investors. They said that material risks needed to be pointed out and that the world has changed, and there are material risks and companies have to note it.

In some ways it is business as usual, and one should look at the definition of material risks. From another viewpoint, it is at least coming to reckoning that water shortages and trees and natural resources have moved off the balance sheet to on balance sheets.

Q: Have any corporations, prior to the SEC decision, voluntarily disclosed climate-related impacts on their business to investors?

A: A lot of companies do, probably 30 to 40 percent. It is not the most radical thing to be involved. Some companies are disclosing it - in the same sector, one company may do it, another one currently may not.

This impacts investors in different ways. For example, if one is an investor in an insurance company that has huge real estate on a shore, investors should know the implications of sea level rise and disruption to real estate.

Clearly, it is up to smart money managers to provide information to investors so they know how to make decisions on data. And they can only make those decisions when they have clear, comparable, consistently disclosed information to use.

Q: What do you see as being the most important result of the new requirements?

A: It gives investors appropriate information about risks and protects them. The value is that accurate and timely information creates a smarter investment community. In our experience, the little silly "what gets measured gets managed" is true.

When companies have to measure whether their investment risk is greater from climate change and drought or whether there will be impact on their output, for example if they are an agricultural company, it forces them to account.

At a news conference on the Nike campus Tuesday, representatives from businesses, unions and youth groups, joined by U.S. Rep. Earl Blumenauer, D-Ore., announced a "Race for American Jobs" campaign that they hope will persuade the Senate to pass legislation similar to that passed in the House.

Speakers said the United States is in an economic arms race with China and must grasp the opportunity to create jobs, reduce its dependence on sometimes-hostile foreign oil suppliers and take advantage of technological innovation that will usher in a "low-carbon economy," as Blumenauer described it.

"We are watching an opportunity that I think is unparalleled," Blumenauer said. The alternative, he said, is for the U.S. to remain on the sidelines "and end up being China's best customer for green products.

He and others said a cohesive national energy policy of subsidies, regulations and incentives will result in thousands of jobs and pay for itself over time in the form of reduced energy consumption and a healthier environment.

Business representatives said their companies have a stake in climate change policies. Jim Hanna, director of environmental impact for Starbucks, said coffee beans grow in limited climate zones.

"Climate change poses a direct threat to our business; it puts our supply chain at risk," he said.

The company's new stores are energy efficient and water efficient, Hanna said, and Starbucks is retrofitting existing outlets. Simple steps such as replacing lighting with efficient LED devices reduce energy usage by 11 percent and will pay for themselves in a couple of years.

There are benefits beyond that: A company's sustainability policies can attract high-quality employees, Hanna said. And Sarah Severn,  Nike's stakeholder mobilization director, said the company's youthful customer base is concerned about environmental business practices.

Mark Edlen,  a managing principal of Gerding Edlen, said a combination of extended tax credits and other incentives could produce thousands of jobs. In Portland alone, perhaps half of 75 million square feet of commercial office space needs to be retrofitted with efficient electrical, water and sewage systems, he said.

He proposed increasing the gas tax and dedicating a portion of it to energy efficiency projects, saying there is "a generation's worth of work" for laborers, electricians, architects, engineers and those who arrange financing for such projects.

Joe Esmonde, renewable energy political liaison for the International Brotherhood of Electrical Workers in Portland, said trained workers are available to rewire buildings and hook up solar panels and wind turbines. "A lot of growth could be done if the market had the right signals" that would come with passing climate change legislation, he said.

Passage of comprehensive energy and climate legislation could produce 13,000 to 26,000 new jobs in Oregon by 2020, according to 2009 research by the University of California, University of Illinois and Yale University. Nationally, the legislation would create 918,000 to 1.9 million jobs, according to the analysis.

Organizers of Tuesday's event are taking the campaign to Denver; Columbus, Ohio; and Manchester, N.H., gathering signatures and business support for climate change legislation. The information will be delivered to Congress and the Obama administration March 10.

One way of judging investor sentiment is through the types of investor resolutions filed each year. This year, a record 95 resolutions involving climate change have been filed. That is a 40 per cent increase over last year’s proxy season, according to Ceres, a coalition of investors, environmental groups and other public interest groups working to address sustainability issues.

It says that the 95 resolutions have been filed with 82 US and Canadian companies, including some of the US’ biggest coal companies, electric power and oil producers; homebuildiers; big box retailers; financial institutions and other businesses investors believe are not adequately disclosing and manging potential climate-related business impacts. These include ExxonMobil, ConocoPhillips, Southern Company, and so on.

In the words of Mindy Lubber, president of Ceres, which helps coordinate the shareholder filings:

"As the SEC recently affirmed with its disclosure guidance, climate change presents clear material risks and opportunities for US busiensses – and investors have a right to know which companies are well prepared and which are not."

Jack Ehnes, chief executive of the California State Teachers’ Retirement System, which manages $131bn in assets, put it this way:

"We want our companies to closely look at the impact climate-change legislation and regulation have on them, to realistically assess those risks, and to consider the indirect consequences of climate change-driven regulation and business trend son thei ractivities. The SEC’s interpretive guidance outlines exactly the kind of action we have been asking our portfolio companies to take with regards to the issues raised by climate change. It fits with our role as a long-term investor focused on providing lasting value of for the educators of California and their families."

The SEC issued guidance in late January to clarify what publicly-traded companies must disclose to investors in terms of climate-related material effects on business operations.

So even as Congress fears signing climate legislation into law, it seems investors are increasingly behind it. They realise the world is changing, and companies are going to have to start accounting for carbon emissions at some point. Better get the framework in place now, so the risks all this will pose to US companies will become clear. That will give them a better sense of the potential impact on their investments.