Big U.S. investors push SEC for oil industry to detail risks of climate change

WILLISTON, N.D. (Reuters) - Calpers, the largest American public pension fund, and nearly 60 other institutional investors will ask the U.S. Securities and Exchange Commission on Friday to require oil and natural gas companies to publish detailed analysis of the risks posed by climate change to their business models.

Smoke is released into the sky at a refinery in Wilmington, California March 24, 2012. REUTERS/Bret Hartman

The letter, also signed several U.S. state treasurers, asks SEC Chair Mary Jo White to require oil producers to publish “meaningful, substantive carbon asset risk disclosures,” much in the way they already disclose information on factors outside their control, such as commodity and currency price swings.

Some oil companies provide general information already about how much they could lose if climate change worsens and regulation or cultural shifts reduce consumption. This letter seeks concrete details about how they reached those conclusions.

Calpers and other investors will tell the SEC more specifics are needed to better gauge whether to invest in the sector, according to a draft letter seen by Reuters.

“I would be surprised if companies like Exxon Mobil and Chevron are not doing some kind of internal analysis already of what the impact on their reserves would be if we change our fossil fuel use,” said Shanna Cleveland of nonprofit Ceres that worked with investors to craft the letter.

“It’s that kind of information, the really technical, down-in-the-weeds information, that investors are trying to get to.”

The letter was timed to coincide with the Monday start of IHS CERAWeek in Houston, the world’s largest energy conference where major oil executives, politicians and regulators will appear.

With crude prices down more than half since last summer, pressure is on the sector to justify costly oil and natural gas projects. Getting access to specific climate change data, the investors hope, may show that the sector has a cost advantage to invest more in solar and wind projects.

The request comes the day after Calpers sponsored a successful shareholder resolution at BP’s annual meeting that requires the oil company to begin stress-testing its operations against climate change risks.

Exxon, the world’s largest publicly traded oil company, said last year climate change poses little risk to its reserves, but agreed to start providing some information about how it arrived at this conclusion.

“Fossil fuel companies can’t acknowledge climate change and their role in it, but then act as if it won’t affect them and their investors,” said Thomas DiNapoli, New York’s comptroller.

Reporting by Ernest Scheyder; Editing by Cynthia Osterman