NEW YORK, NY - Four state and city treasurers and comptrollers, representing approximately $190 billion in investments, today expressed concern about the risks of climate change to long-term investments, and announced plans to hold a summit with other institutional investors to examine the issue.

Denise Nappier, Treasurer, State of Connecticut; William C. Thompson,Jr., Comptroller, City of New York; Alan Hevesi, Comptroller, New York State; and Jeb Spaulding, Treasurer, State of Vermont, all expressed concern that global warming posed long-term economic risks that threatened the value of retirement funds. They made the announcements at the CERES conference, a gathering of investors, environmentalists, analysts, and business leaders being held April 1 and 2 in New York City.

Treasurer Nappier, and Comptroller Hevesi also indicated that funds they represented would likely vote their proxies in favor of shareholder resolutions filed this year against portfolio companies requesting disclosure of and plans to reduce greenhouse gas emissions. Comptroller Thompson, as chief investment adviser to five New York City funds, indicated that he would recommend they vote their proxies in favor of the resolutions.

In a series of speeches at the conference, the officials cited a variety of potential risks posed by climate change, from damages caused by climate change itself, to future potential regulatory scenarios, competitive pressures in development of new technology, and potential future legal liabilities for heavy emitters of greenhouse gas. In her speech on Tuesday, Treasurer Nappier announced plans to hold an institutional investors' summit to examine the issue further.

"All funds, but particularly pension funds, have a responsibility to their shareholders to be sure that they're adequately assessing risk in their portfolio companies." Treasurer Nappier (CT) said. "These resolutions should serve as a notice that we will not tolerate irresponsible corporate behavior that could potentially undermine the integrity and soundness of our pension funds and the health of our planet and its people. We need to pull corporate America's heads from the sand and look at this obvious long-term economic risk. In my view, institutional investors are in a position to lead that effort."

"It's not hard to see that global warming is going to have an effect on many sectors of our economy. As we see disruptions in water supply, changing agricultural seasons, insurance losses and rising premiums from severe storms, and other changes, we know that all has associated costs," Alan Hevesi, New York State Controller, said. "CEOs in charge now might not be around to see all those costs hit, but retirees will be. It's my job to watch out for risks on the horizon to keep New York's investments solid and strong over the next twenty or thirty years."

"In 1989, we helped found CERES because we recognized that many environmental issues pose long-term risks to business if not managed properly," William Thompson, New York City Comptroller said. "Climate change is a prime example of that kind of long-term risk, and yet there is little movement to address it."

Jeb Spaulding, Treasurer of Vermont, expressed support for Nappier's proposal for a summit to examine the relationship between climate and portfolio risk:

"Fund managers are routinely asked questions about how large scale trends are likely to affect a portfolio," said Treasurer Spaulding. "Climate change is the definition of a large scale trend. I would be interested in our fund managers' views on the way in which climate risk should be evaluated in our long term portfolio strategy."

A record 31 "global warming" resolutions were filed against 27 companies this year, primarily with companies from heavily-emitting sectors such as auto, electric utilities, oil and gas, and manufacturing. The resolutions requested disclosure of, and in some cases plans to reduce, greenhouse gas emissions. The average support level for these resolutions has more than doubled since 2000, rising to an average18.8 percent support level in 2002.

The State of Connecticut was the primary filer of one such resolution against American Electric Power (AEP), the largest single emitter of greenhouse gases in the world. Treasurer Nappier explained her state's concern:

"In American Electric Power's own disclosure to the SEC they acknowledge climate change as a risk factor," said Treasurer Nappier. "And yet, they, like most companies, haven't presented to their shareholders a comprehensive assessment of these risks and how they plan to address them."

Properly submitted shareholder resolutions appear in company proxy statements, which are circulated to all shareowners in advance of a company's annual meeting. Though such resolutions are not binding, they prompt top executives and board members to draft and approve statements in response (and almost always in opposition) to these proposals. For some companies, such proxy statements provide the most detailed and current assessment available to shareholders on the global warming issue.

The global warming shareholder campaign is one of the longest running since the South Africa divestment campaign of the 1970s and 1980s--and is fast becoming one of the most widely supported as well. Pension fund concern was a cornerstone of the movement to divest from apartheid-era South Africa.

Robert Massie, Senior Fellow, CERES, and author of Loosing the Bonds, The United States and South Africa, compared the divestment movement to current rising investor concerns about global warming:

"With South Africa, we saw a similar situation where the U.S. government had decided not to deal with the issue and so Wall Street decided not to be concerned," Massie said. "But then individual state funds began to ask their fund managers to examine the issue, and gradually there was a nationwide move toward consensus to divest. That's happening now with global warming- this issue is not going to disappear."

Mindy Lubber, Executive Director, CERES, explained the funds' concern about climate risk:

"Climate risk is pervasive, global, volatile, and inexorable -- the very definition of long-term risk. No fund manager could deny that it will have some impact on the market value of a portfolio. The question is how much."

Background: 2003 Global Warming Resolutions

OIL & GAS
Going to a vote: ChevronTexaco, ExxonMobil (4 pending), Petro-Canada, Imperial Oil
Omitted: ConocoPhilips (Withdrawn because results achieved), Occidental, Encana, Nexen

AUTOMOTIVE
Ford, General Motors

ELECTRIC POWER
American Electric Power, PG&E, Southern Company,
Omitted: Cinergy, Excel

OTHER COMPANIES
Citigroup, Gillette,Weyerhauser, General Electric

Withdrawn because results achieved: Cummins, Caterpillar, United Technologies, Marsh & McLennan, Reebok, Staples

Withdrawn because CEO resigned: Sprint

For more information please visit the CERES website, www.ceres.org

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