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Swiss Bank Targets Top Companies' Impact On Climate Change

LaRevueDurable, a Swiss-based environmental magazine, is calling for the system to be adopted as a label categorising publicly-quoted companies or investment funds, similar to those rating the energy efficiency of refrigerators or washing machines for consumers.
by Peter Capella
Geneva (AFP) Oct 26, 2006
Investors can now assess how the world's 1,800 biggest companies and their products are contributing to climate change before investing in them, say the developers of a new rating system. The "Envimpact" rating weighs the most environmentally-sensitive phase in the life cycle of the products or services delivered by 140 corporate sectors, according to Centre Info, a Swiss company that specialises in social and environmental rating tools for investors.

Envimpact also focuses on the quantity of carbon dioxide emissions, which are regarded by many scientists as the main cause of global warming.

Centre Info devised the system along with Swiss private bank Pictet.

"The idea came during a discussion with Pictet and the Ethos investment foundation, we had the feeling the classical methods missed the key point," said Yvan Maillard, an analyst at Centre Info.

"We decided to develop a method that focuses on a few key indicators that analyse the real impact of companies, not their statements of intent, but really their current performance," Maillard told AFP.

The rating assesses the climate change footprint of the world's 1,800 largest companies in terms of capitalisation in sectors that include the motor industry, oil, electronics, retail, banking and insurance industries.

"It's a very intuitive way of judging companies," said Christoph Butz, a sustainability expert at Pictet.

The bank adopted the evaluation alongside the existing brace of about 150 mainly qualitative environmental indicators available for its sustainable or ethical investment funds.

That helps investors make an informed choice and lends greater credibility to the evaluation by being more scientific, Butz argued.

"I felt that the many criteria that have accumulated over time in some way dilute the true figures," he explained.

French carmakers Renault and Peugeot, followed by Italy's Fiat, achieved the best ratings in the auto industry under the system.

Centre Info is aiming to publish its study of a dozen automotive companies over the coming week (October 23 to 27), along with another one for the electric utilities industry.

The rating of auto companies is heavily weighed towards the use of their products and the average fuel consumption of the cars they sell.

Sales by the three firms with the best rating is dominated by smaller cars. Cars sold by Renault pump out an average of 159 grammes of carbon dioxide per kilometre each for a fuel consumption of 6.4 litres per 100 kilometres (36 miles per US gallon).

In traditional measures used for sustainable or ethical funds, German group DaimlerChrysler is rated highly because most of its plants or offices or processes meet an international environmental certification, analysts said.

But its vehicles average 273 grammes of carbon dioxide and fuel consumption of 11 litres per 100 kilometres (21 miles per US gallon), according to Envimpact.

Firms making jewellery or books have the greatest environmental impact during the extraction of raw materials -- stones, metals or trees for paper, under Centre Info's assessment.

Oil companies with larger outputs of natural gas, which produces less carbon dioxide than oil, get better ratings.

In some sectors such as textiles, the focus is on emissions in the production process.

"If you take carbon dioxide, it's clear that services sectors -- banking, insurance -- have the best ratings. The worst are those that involve a significant user phase such as aircraft, cars or trucks," Maillard said.

Pictet has not completely abandoned existing environmental and social indices for its specialised funds.

"We think that there's a lot about transparency, company policy and so on, which is worth maintaining," Butz said.

The new system also places less emphasis on huge environmental or sustainability reports many companies now release every year.

"Companies don't cheat, but they have a certain bias of reporting where they are good," said Butz.

The data behind Envimpact comes from European, Japanese and US universities, official sources and the companies themselves. Some firms baulked at providing "business-sensitive" data, Maillard said, but they were starting to warm to the idea.

Centre Info hopes to expand the use of the rating system in the financial services sector.

LaRevueDurable, a Swiss-based environmental magazine, is calling for the system to be adopted as a label categorising publicly-quoted companies or investment funds, similar to those rating the energy efficiency of refrigerators or washing machines for consumers.

That would help shareholders or small savers make choices with climate change in mind, in turn influencing corporate policy, the magazine argues.

Source: Agence France-Presse

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UCLA And JPL Partner On Regional Climate Change And Support Future Space Missions
Los Angeles CA (SPX) Oct 26, 2006
UCLA and NASA's Jet Propulsion Laboratory (JPL) have formed a research institute to better understand and predict regional environmental and climate change and support future space missions. The Joint Institute for Regional Earth System Science and Engineering will examine relationships between global climate change and Southern California weather and climate patterns and the environment.

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