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Corporate Responses to Climate Change: Shifting from Loss to Opportunity

By Melissa J. Anderson

Deutsche Bank released a report last month debunking 12 myths about climate change, as a means to bolster support for its investments in the climate space. The report, Climate Change: Addressing the Major Skeptic Arguments [PDF], was written by researchers at Columbia University.

According to Reuters, the bank has over $5 billion invested in climate related funds. Mark Fulton, Head of Deutsche Bank’s climate change research, explained that the report arose from the bank’s desire to reassure investors.

He said, “What is the state of the science? We asked Columbia, as trusted advisors, to give us a balanced answer in some detail.” He continued, “We are looking for financial investment opportunities around the climate change trend. The paper reassured us of our investment thesis and it should reassure our investors.”

Necessitated Opportunities

But the report is about more than reassuring investors or giving explanations for the bank’s heavy investment in the area. The paper symbolizes a larger push to get past politicized viewpoints on the subject of climate change, in order to take advantage of the opportunities for growth and development necessitated by it.

Fulton explained, “The current crisis is making the necessity of tackling climate change an opportunity to stimulate growth through investment opportunities.”

He explained:

“Encouraging investment in renewable energy is a key focus. Energy efficiency technologies are obviously highly desirable in economies facing recession. Infrastructure stimulus can be tied directly to climate-sensitive sectors such as power grids, water, buildings, and public transport, which present a vast field for the creation of new technologies and jobs. Governments have before them a historic opportunity to ‘climate proof’ their economies’ as they upgrade infrastructure as a core response to any economic downturn.”

Economy No Excuse for Inaction

Kevin Parker, Global Head of Deutsche Bank’s Asset Management division and a member of the Bank’s Group Executive Committee Parker said that the sluggish economy is no excuse to avoid action – on behalf of both governments and businesses. He said:

“The aim must be to create a clear long term regulatory regime that puts an accurate cost on carbon and encourages the development of alternatives. If governments recognize the necessity of creating the right regulatory environment, investors will recognize the opportunity and step in. Severe though it is, the current financial crisis can eventually be fixed, and should not be used as an excuse for inaction.”

But Do They Practice What They Preach?

Deutsche Bank has long been a vocal supporter of climate change regulation. For example, last year Parker told Reuters, “They’re asleep at the wheel on climate change, asleep at the wheel on job growth, asleep at the wheel on this industrial revolution taking place in the energy industry,” regarding US inaction on climate change. As part of its “Know Your Number” campaign, it constructed a “nearly 70-foot tall digital billboard” outside Madison Square Garden and Penn Station in New York, which is reminiscent of the Times Square Debt Clock counting up the US’ rising deficit for the past 20 years. For Deutsche Bank, the climate issue is a business imperative.

According to the company’s corporate social responsibility website, they are walking the walk, so to speak. The firm plans to go carbon-neutral by 2013, reducing carbon emissions by 20% each year from a 2007 baseline. According to its 2009 CSR report released in March of this year, “Based on initial estimations… we are again on target to achieve 40 percent of carbon reduction emissions when compared to 2007 and without the necessity of purchasing any offset certificates.”

Additionally, the report says “69% of our global electricity needs were supplied by renewable sources; that is 21 percentage points more than in the previous year.” The company lists several other sustainability achievements within the report, as well, showing that they are not only looking to capitalize on the climate change opportunities, but that they are doing their part to help the planet as well.

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