Public opinion must lead climate change investors

LONDON (Reuters) - A bigger shift in public opinion would drive investment banks and fund managers to put more money into tackling climate change, analysts and investors told a conference in London.

A United Nations panel on climate change will publish next Friday hardened evidence for the adverse consequences of global warming on health, food and water.

Harder evidence of man-made climate change would spur the kind of public opinion and policy shifts needed to direct capital into tackling the problem, said Nick Butler, director at the Cambridge Center for Energy Studies.

"Despite all the rhetoric and coverage greenhouse gases are rising about 2.5 percent a year," he said on Thursday, the first day of the event bringing together business and academics, called the London Accord, whose inaugural session was hosted at Reuters.

"Ninety percent of money invested in energy supply goes to oil and gas. The impact of climate change could come much quicker. If these impacts started to be very visible that might change behavior."

New policies need to do a better job attracting short term investors into technologies like energy efficiency, widely seen having a big impact on climate change, said Nick Robins, head of Sustainable and Responsible Investment (SRI) funds at Henderson Global Investors.

"If the real opportunity is energy efficiency why is so much political and investment attention in clean energy supply?"

Investment bank research teams have a big role in guiding capital, given their analytical expertise, and need to catch up, say fund managers concerned about the impact of global warming on their holdings.

"The sell-side has greatly increased its coverage over the last two to three years, but there's some way to go before climate change is fully integrated into investment research," said David Russell, co-head of responsible investment at the UK-based Universities Superannuation Scheme (USS).

The USS has up to 80 million euros ($106.5 million) invested in green businesses, versus its total assets of 29 billion pounds ($56.78 billion).

Climate impacts, whether or not due to global warming, are already starting to move public opinion, and so politicians, regulations and investments, reckoned the environment spokesman for the UK opposition Liberal Democrat party, Chris Huhne, citing a recent, severe Australian drought.

Australian Prime minister John Howard pulled Sydney out of the Kyoto Protocol on global warming, but recently banned high-carbon emitting incandescent lightbulbs.

"I think we are at the end of a wave of de-regulation, " said Huhne. "The need to tackle climate change means we could be at the beginning of a wave in the other direction."