SECRETARY-GENERAL STRESSES CRUCIAL IMPORTANCE OF NEW FINANCIAL APPROACHES IN ADJUSTING, RESPONDING TO CLIMATE CHANGE THREAT

SECRETARY-GENERAL STRESSES CRUCIAL IMPORTANCE OF NEW FINANCIAL APPROACHES

IN ADJUSTING, RESPONDING TO CLIMATE CHANGE THREAT

Following is the text of Secretary-General Kofi Annan’s remarks at Institutional Investors Summit on Climate Risk today, 21 November:

Thank you very much, Ms. [Denise] Nappier for that warm introduction.  You also made a slip there, saying I was [Secretary-General] of the United States and I whispered to Tim [Wirth] -– I said, could you imagine if I could combine both functions, what I can do. [laughter, applause]

Mr. Vice President, [Al Gore], it is really wonderful to see you here again.  I think one of the last times you were here you presided over the Security Council on a very critical issue and we are really very happy to see you here.

Mr. [Leon] Panetta, [Chairman, New York Stock Exchange Oversight Board], and my good friend Klaus Toepfer, Tim Wirth, ladies and gentlemen,…

     …And let me start by saying that there has never been so much money in one room at the United Nations [laughter].  Please leave some behind.  We need it.

I would like to thank you for coming to the United Nations for this important discussion on climate change.  I take your presence here as a sign of the seriousness with which you regard the issue.

Other speakers have told you what the world’s best scientists are telling us about the consequences that are looming for the world -- and for your own budgets and businesses -- if we do not mount a sufficient response to climate change.  I would like to use the short time we have together to suggest a few areas where you can be particularly helpful.

     It is governments, of course, that bear primary responsibility for responding to the warnings.  And many are doing so.  The United Nations Framework Convention on Climate Change enjoys nearly universal membership.  Almost 120 countries have ratified the Kyoto Protocol -– although it has not yet entered into force.  Most countries agree that climate change is a real problem.  They want to avoid the potential damages, and to minimize the costs of response strategies while ensuring that they are effective.  And they recognize that new approaches, especially in the financial arena, will be crucial to our ability to adjust and respond to this threat.

That is where you come in, ladies and gentlemen.

First, your investments will have a decisive impact on trends in future greenhouse gas emissions, and on our ability to adapt.  Industries and non-governmental organizations are working together to develop tools to help with the new types of decisions you will be called upon to make -– for example, on the financial viability of new technologies, or the potential damage to property and human health.  Those decisions can greatly affect how people work and live over the coming decades.

Second, you can encourage corporations to voluntarily reveal information about how their operations affect, and are affected by, climate change.  This is an admittedly complex task.  But it would send a message that corporate performance will be measured in both financial and environmental terms.  This would be a real step forward -– not only on this important issue, but also for corporate governance, transparency and accountability in general.

Third, you could help to create the conditions for efficient emission trading systems, standardized accounting methods and the like.  The successful launch of the Chicago Climate Exchange here in the United States is one example of an initiative to create a carbon market.  We need more such innovative thinking on financing mechanisms and new insurance products.

This is a vast undertaking that will require a sustained effort not for a few years, but for this whole century.  It is also, I hope, a journey we will make together.  The United Nations has a long history of dialogue and cooperation with business and industry, but we are relatively new to the investment community and to treasurers, trustees, financial executives and fund managers such as yourselves.  I very much look forward to deepening those ties.  Already, the United Nations Environment Programme’s Finance Initiative has benefited enormously from the involvement of the financial community.  The UNEP has also worked closely with the CERES network for change coalition, our partner in today’s event, to set new disclosure standards through the Global Reporting Initiative.

The entire United Nations system is committed to intensifying this cooperation.  We are well aware that, as investors responsible for more than $1 trillion, you are the guardians of solemn promises to men and women who have entrusted you with their earnings.  We appreciate the weight of the decisions you make every day in directing a significant part of the capital flows that fuel the global economy.  And like the United Nations, you are in the business of looking ahead, identifying both opportunities and challenges for the human community.  In a real sense, we are all stewards of the future.  I thank you for the leadership you have exercised by coming here.  Let us do our utmost to ensure a prosperous future for all people on our one and only planet.  Thank you very much.

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