Most discussion of the impact of proposed clean energy legislation has focused on consumer-facing energy firms, such as major oil companies and electric utilities. The American Clean Energy and Security Act (ACES), which has already passed the House, will affect wholesale energy companies, as well. As oil and gas remain integral to the US economy, how this sector’s firms respond to these provisions will have broad implications for consumers and investors.

Quite simply, carbon legislation will make carbon risk material. Effective carbon management will become a quantifiable competitive advantage. “Proactive measures may actually outweigh, at least initially, the potential direct costs of the proposed climate change regulation,” write Sebastian Brinkmann and Julie Hilt Hannink, authors of a new RiskMetrics study of ACES’ impact on the US independent oil & gas sector. (On Feb. 24, RiskMetrics will present a free webcast on environmental compliance costs for this sector – click here to register.)

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RiskMetrics Group today announced its sixth annual Global ESG 100. The Global ESG 100 companies are selected from a pool of 2,000 firms in more than 50 countries for their effective management of environmental, social and governance (ESG) risks and opportunities.

This year’s list welcomed 35 companies, 20 of which have never been listed, including Sharp Corporation, which has strengthened its environmental performance and ramped up solar cell production. Other newcomers included Safeway Inc., Discovery Communications Inc., Abertis Infraestructuras, Danske Bank A/S, and Osaka Gas Company.

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Last weekend, Haitian microlender Fonkoze served its customers in a manner worthy of a James Bond movie. While Haiti’s commercial banks remained closed after the January 12 earthquake, Fonkoze reopened 34 of its 42 branches, disbursing both deposited funds and remittances from abroad. Last week, to ensure a steady supply of currency in Haiti, Fonkoze transferred $2 million in cash from its US account to a Florida Air Force Base.

On Saturday morning, after a C-17 cargo plane brought the money to Port-au-Prince, helicopters delivered it – hidden in office supply boxes – to ten drop points, from which Fonkoze employees restocked their branch locations.

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In the aftermath of the global financial crisis, many investors have grown concerned about standards of corporate governance. In fall of 2009, the European Commission released a study of corporate governance monitoring and enforcement practices in its member states. The study was undertaken by RiskMetrics Group in collaboration with BusinessEurope, ecoDA and their affiliates, and Landwell & Associates and their affiliates.

In most EU states, national governance codes set rules with which corporations must comply, or else explain why they have not complied. The RiskMetrics study found support for “comply-or-explain” regimes, but also found “some deficiencies,” including “unsatisfactory level and quantity of information on deviations by companies and a low level of shareholder monitoring.”

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Last week, I asked the Social Investment Forum listserv to recommend organizations who are working to help the people of Haiti. I was heartened by the response. Links to donate to these groups are listed below.

I also spoke with RiskMetrics analyst Yasmine Lonon, who helped research a study of developing-nation disaster risk for the World Bank’s Disaster Management Facility. In response to a question from our colleague Jane Meacham, who noted that there’s almost no private insurance in Haiti, Yasmine explained how a lack of insurance hinders disaster preparedness:

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In a report released January 6, shareholder coalition Ceres found that many asset managers don’t account for risks associated with climate change. Ceres surveyed 84 managers who are collectively responsible for $8.6 trillion in assets. 44% don’t believe that climate risk is financially material; more tellingly, as Barry B. Burr notes in Pension & Investments, 71% only consider climate risk when they’re marketing a “green” fund.

Spotting Material Risks beyond this Quarter

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On Dec. 31, Index Universe published a helpful survey of funds based on environmental, social and governance (ESG)-screened indexes. Lorne Abramson, a California-based adviser and manager, compares the strategies, costs, and performance of a number of exchange-traded and separately-managed index funds.

“Investing Responsibly” addresses two persistent misconceptions about ESG investing:

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This week, world leaders meet in Copenhagen to coordinate their efforts to address global climate change. As summed up by a RiskMetrics fact sheet on the event, the summit’s daunting goal is to set fair, achievable emissions reduction targets for both developed and developing nations.

The Financial Times’ Martin Wolf has succinctly stated why this will be so difficult:

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[Ed. Note: In preparation for the Copenhagen summit, the KLD Blog will present some perspectives on global climate policy. The following analysis of Australia’s rejection of an emissions-credit trading scheme comes from RiskMetrics analyst Mark Barraclough. Mark is based in Sydney and researches Australian firms, with a focus on the energy and extractives sectors.

As the US and other developed-world democracies debate their own “cap and trade” schemes, the case of Australia’s Carbon Pollution Reduction Scheme (CPRS) may prove instructive.]

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Like many of us at RiskMetrics and the former KLD, I belong to LinkedIn groups that address socially responsible investing (SRI). This week, an “SRI Professionals” discussion brought up one of the seminal questions in SRI: What does it cost, compared to investing that disregards corporate environmental, social and governance (ESG) practices?

With permission from Advocacy Investing’s Marc Lane, leader of the SRIP group, here is Richard Nash of Investors Group in Vancouver, BC:

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