Investor Network on Climate Risk

The Investor Network on Climate Risk is a network of investors and financial institutions that promotes better understanding of the financial risks and investment opportunities posed by climate change. INCR is coordinated by Ceres, a coalition of investors and environmental groups working to advance sustainable prosperity.

The Investor Network on Climate Risk (INCR) was launched at the first Institutional Investor Summit on Climate Risk at the United Nations in November 2003. INCR’s membership consists of more than 100 investors managing nearly $10 trillion in assets. Members include asset managers, state and city treasurers and comptrollers, public and labor pension funds, foundations, and other institutional investors. INCR leverages the collective power of these investors to promote improved investment practices, policies, disclosure and corporate governance practices on the business risks and opportunities posed by climate change.

Given the global nature of climate change, climate risk has become embedded, to a greater or lesser extent, in every business and investment portfolio. Severe weather events and changing weather patterns, current or impending regulations imposing a cost on carbon, and an altered competitive environment will have an inescapable impact on businesses. Climate change is increasingly being seen as a strategic issue, and leading companies are taking action now to mitigate the risks and take advantage of the opportunities arising from climate change as a way to prepare for the emerging low-carbon global economy.

The risk that climate poses to any individual business varies, but nearly every company will face some type of pressure from the changing climate including:

Companies with significant greenhouse gas (GHG) emissions or energy-intensive operations face risks from new state, national and international regulations limiting carbon emissions and imposing a cost on carbon. While momentum for mandatory federal climate legislation is growing, California and 10 Northeastern states have already taken regulatory action to require emission reductions. Japan, China and other leading trading partners have instituted GHG emission reduction targets, fuel emission standards and renewable energy mandates. Meanwhile, all of Europe is reducing GHG emissions under a cap-and-trade carbon emissions trading program already valued at over 64 billion a year. All U.S. companies – including oil producers, banks and automakers – will be impacted by these fast-spreading regulations.

Businesses are at risk from the physical impacts of climate change, including the increased intensity and frequency of severe weather events such as prolonged droughts, floods, storms and sea level rise. Among the more recent examples is the $10 billion of insured losses, including the destruction of 116 oil platforms, that offshore oil producers suffered from the 2004-2005 Gulf Coast hurricanes.

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