In a sign that the financial markets are starting to take climate change seriously, investors are now demanding to know how the energy industry plans to react to impending CO2 emission regulations, and how those reactions will affect their bottom lines, according to the Wall Street Journal. This year, shareholder groups have put out 31 resolutions at 20 different energy companies asking the firms to divulge their internal deliberations on the matter. Six of those companies, including Chevron-Texaco, have already persuaded shareholders to drop their resolutions in exchange for promises to address climate change directly.
This month, moreover, the Securities and Exchange Commission ruled that ExxonMobil Corporationthe world's largest publicly-held companyis obligated to provide its shareholders with explanations of its position on global warming, as well as its plans to meet Kyoto Protocol emissions cuts at its overseas facilities. The ruling is unique in that it demands the company reveal details of how its management uses scientific data to formulate climate change policies. Over the years, Exxon has repeatedly and publicly regarded the science of climate change as "inconclusive", a stance it has used to justify its resistance both to curtailing emissions and investing in alternative and renewable energy sources.
In light of the fact that other companies have begun to pursue voluntary emissions-reduction programs, the resolution against Exxon-Mobil asks that the company's board of directors estimate the difference in costs between immediate, voluntary action and the potential cost of new regulations, should they be enacted in the future. The assumption here is that if it's cheaper to begin reducing emissions voluntarily, it would be financially irresponsible for the company not to do so.
This is all an early sign that the Kyoto Protocol, which has been criticized as weak and ineffective, is already starting to influence industry behavior. Still, many believe that the industry response will be slow, and Exxon's past behavior, which also includes financial support for a new action plan (PDF) aimed at debunking the science of climate change, should continue to receive increased scrutiny.