One of the America’s largest builders of coal-fired power plants has been forced to now give investors detailed warnings about the risks that climate change poses to its business.
According to the New York Times, the agreement between New York’s attorney general, Andrew Cuomo, and Xcel Energy of Minneapolis, “could open a broad new front in efforts by environmental groups to pressure the energy industry into reducing emissions of the greenhouse gases that contribute to global warming.”
Although shareholder resolutions are gathering a pace, “this really takes it another step, by making it a settlement agreement that should have an impact across the industry,” argues Dan Bakal, the director of electric power programs at Ceres, a coalition of investors and environmental groups.
According to the NYT: “Cuomo subpoenaed Xcel and four other companies last September, seeking to determine whether their efforts to build new coal-fired power plants posed risks not disclosed to investors, like future lawsuits or higher costs to comply with possible regulations restricting carbon emissions.”
“This landmark agreement sets a new industrywide precedent that will force companies to disclose the true financial risks that climate change poses to their investors,” Mr. Cuomo said in a statement. “Coal-fired power plants can significantly contribute to global warming, and investors have the right to know all the associated risks.”
Under the agreement, Xcel has to disclose the financial risks of lawsuits and of federal or state court decisions that would affect its business. The company will also analyze and disclosed the “material financial risks” to itself associated with climate change.
Now its time to do the same with the oil industry…