Investing in efficiency

People like to ask me about environmentally or ‘climatically’ responsible investing, either out of a) genuine interest in supporting companies that are taking action on climate change, or b) the belief that I may have some savvy investment tips (er, given the number of my possessions held together by duct tape, I'd say no).

I did, however, recently come across this interesting study on the concept of climatically responsible investing. It uses a metric originally designed to measure social responsibility to evaluates how six companies, including BP, Shell and a random university, measure up in efforts to combat climate change (pdf).

The study is interesting - and amusing. The university finishes last. Though I suspect it is not the case with the university, the scoring method - relative improvement from each company’s independent starting point – could bias against companies that were already energy efficient.

A similar point can be made about international climate policy. Emissions reductions should be easier in places like the North America, than in Europe and Japan, which were already more energy or GHG-efficient. The fact that emissions reduction policy has been less acceptable in North America suggests that the main obstacle is culture, not opportunity.