Responsible-Investor reported yesterday that long-term investors are facing an environmental bill that could take trillions from their climate assets over time if they don’t start forcing their organizations/regulators/asset managers to reduce their climate change impact, according to a study backed by UNPRI and UNEP and conducted by Trucost.

Trucost found that the world’s top 3,000 companies by market cap were responsible for $2.15 trillion worth of environmental damage in 2008 (water and air pollution, GHG emissions, general waste and resource depletion). This number is in comparison to the total global environmental damage in 2008 at $6.6 trillion (11% of the global GDP, and 20% more than the $5.4 trillion decline in the value of pension funds in developed countries caused by the global financial crisis in 2007/08).

This figure could reach $28.6 trillion by 2050 with the utilities, oil/gas producers and industrial metals/mining industries the biggest offenders. According the the UNPRI and UNEP, workers and retirees could see lower pension payments from funds invested in companies with significant environmental damage costs when the government starts imposing a stricter “polluter pays” principle.

Large investment portfolios will also be affected through higher insurance premiums on companies, taxes, inflated input prices and the costs of clean-up. UNPRI and UNEP said that large institutional investors need to see themselves as univeral owners invested in the broad economy, and acting in the best interests of the global economy for long-term growth.

To read the full article, please click here.

These stats are pretty staggering – do you think institutional investors will push the climate issue with companies to be more environmentally responsible in the long-term? Discuss!