BOSTON, MA - April 16, 2008 - The mutual fund industry's previously icy attitude toward climate change shareholder resolutions is beginning to thaw as Wall Street starts to recognize the financial risks and opportunities of global climate change, according to a new Ceres report announced today analyzing the voting records of 1,285 funds of 62 leading mutual fund firms.

The report, evaluating 2004-2007 proxy votes, shows that historic opposition toward such resolutions is softening, with some fund firms such as Goldman Sachs supporting many climate resolutions outright, and others, such as Fidelity and Janus, abstaining on most or all resolutions after opposing them in the past. Opposition has dropped from three-quarters of fund votes to less than two out of three, while the number of abstention votes has more than doubled.

Still, many mutual funds are acting inconsistently on climate change -- offering new climate-related funds and research products while continuing to oppose virtually all climate-related resolutions. The inconsistent behavior is especially apparent at Morgan Stanley, State Street Global Advisors and other Wall Street firms which are investing aggressively in new climate-related business activities, yet have opposed virtually all climate resolutions in recent years. One positive stand-out noted in the report: Goldman Sachs, which is both promoting climate-related investments while also supporting climate change resolutions.

"More mutual fund firms are waking up to the broad financial realities of climate change, but very few are integrating this awareness across all of their business activities, including proxy voting policies," said Mindy S. Lubber, president of Ceres and director of the Investor Network on Climate Risk. "Investors should be scrubbing their portfolios for climate risks just as they're now scrubbing them for hidden sub-prime risks. Mutual funds that are ignoring climate resolutions aimed at boosting corporate disclosure of climate risks are failing in their fiduciary responsibilities and failing their customers."

"Fund managers are beginning to recognize that climate change issues are an indispensable element of assessing investment risk, and that proxy voting is one element of managing that risk," said Nell Minow, co-founder and editor of The Corporate Library. "We expect to see increasing support for these resolutions and withhold votes for board members at companies whose practices and disclosures show inadequate attention to the impact of climate change concerns."

The report, based on proxy voting data compiled by researcher Jackie Cook, is the fourth by Ceres examining mutual fund proxy voting practices on climate change shareholder resolutions. The report shows that near universal opposition to climate resolutions is gradually eroding as scientific evidence of climate change and its far reaching business impacts has become more conclusive. The industry's reduced opposition coincides with rising overall investor support for climate-related resolutions, which received record high voting support in the 2007 proxy season.

The report also highlights a growing number of climate-related fund products and related business strategies by mutual fund firms -- a trend that is contradicted by many of these same firms still opposing most or all of the climate resolutions they voted on in 2007.

"Ultimately, such schizophrenic behavior is creating financial and reputation risks for these firms -- risks easily avoided by adopting more sensible proxy voting policies on climate change," the report concludes.

Among the report's other key findings:

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Ceres is a nonprofit advocacy organization working to accelerate the transition to a cleaner, more just, and sustainable world. United under a shared vision, our powerful networks of investors and companies are proving sustainability is the bottom line—changing markets and sectors from the inside out.

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