Investors call for 'green' focus in economic recovery measures
Jupiter was one of a group of ten major investors, representing over £400 bn in funds under management, who have written to the UK Prime Minister, as chair of the G20 summit in April, supporting a strong 'green' element in programmes of fiscal stimulus undertaken by governments.
 
The investors' intervention follows President Obama's announcement of a stimulus package containing major investments in low-carbon energy and energy efficiency and echoes calls for 'a green new deal' by others such as the UN's Environment Programme and Lord Stern, the former head of the UK Government Economics Service.

The letter said: "Long-term returns on investment depend on the recovery from the current crisis being a sustainable one, which safeguards the environment as well as reviving the economy. Investment in low-carbon energy, for example, can more effectively boost demand, create jobs, increase energy security, reduce dependence on fossil fuels and revitalise growth markets.

"Private sector investment has a major role to play in such a recovery and there is now an opportunity to construct stimulus packages in such a way as to lever in funding from institutional investors who act on behalf of millions of shareholders, pension fund members and savers. We therefore encourage governments to work closely with the investment community to shape frameworks which encourage private capital to be mobilized, as well as public funds, to bring about a truly sustainable recovery."

Jupiter supports greater carbon disclosure
In February 2009, the Carbon Disclosure Project (CDP) issued its annual request for information about the climate change footprints of 3,700 listed companies around the world.

The CDP request is made on behalf of institutional investors, which includes Jupiter Asset Management, representing a combined $55 trillion of assets under management. The number of investors that signed the information request rose by almost a quarter to a record 475 in 2008, compared with 385 the previous year, reflecting the rising importance of climate change within investment institutions.

In addition, we have written to approximately 40 FTSE 350 companies held in Jupiter funds, which did not participate in CDP 2008.

A key provision of the Climate Change Act, passed into law in November 2008, is that the government issues guidance in 2009 on the way companies report their greenhouse gas emissions. This is in anticipation of the April 2012 deadline for the government to make emissions reporting mandatory.

Further, the Conservative Party announced in 'Our Plan for a Low Carbon Economy', launched in January 2009, that they were disappointed that the government had not shown greater leadership on the issue of mandatory corporate reporting in the Climate Change Act. They propose, if elected, to bring forward the date that the largest companies are required to report on carbon emissions.

Given the prospect that carbon disclosure is set to become mandatory by April 2012, we are keen to hear how non-reporting companies are preparing for this type of disclosure. Feedback from companies to date shows that they are taking steps towards the public disclosure of carbon data, with a number planning to disclose this year.

www.cdproject.net

Jupiter sponsors 'Big Idea' at the 2009 Observer Ethical Awards
As environmental issues top agendas worldwide, the Observer Ethical Awards 2009, in association with Ecover, seek to recognise individuals and companies that have gone the extra green mile.

For the second year running, we are sponsoring the 'Big Idea' category at the awards. This is open to individuals, businesses or groups who have devised innovative consumer products or behaviour-changing ideas. We continue to sponsor this award, believing it supports fledgling green business ideas that may have a real impact in the drive towards a low carbon economy. Last year's winner was Ewgeco, a device that measured energy and water use.

The winner will be decided upon by an expert and celebrity panel, which includes Jupiter's Head of Socially Responsible Investment Emma Howard Boyd, actor Colin Firth and businesswoman and Dragon's Den star Deborah Meaden.  The judges' decision will be based on a number of factors: the level of innovation, its adaptability and scalability, and the impact of the prize money in its development.

http://www.guardian.co.uk/observer-ethical-awards

Pathways to a Low-Carbon Economy
In February, we attended a presentation by McKinsey's* Climate Change team, on their recently updated report: 'Pathways to a Low-Carbon Economy'. The report looks at the economic feasibility of currently available technology to mitigate climate change.

Among its many conclusions, the report underlines the need for much greater policy intervention and behavioural change to deliver the carbon reductions necessary to avert catastrophic climate change. Even though energy efficiency offers a quick and inexpensive way to make cuts to carbon emissions, governments have been slow to roll out regulation to improve technical efficiency standards. Governments seem to be banking on emissions trading schemes to reduce emissions but McKinsey's report suggests that direct investment in transport infrastructure and the building sector will be equally important. In fact sixty percent of the future investment required to mitigate climate change will need to go into these sectors.

Jupiter's green and SRI funds invest in companies that provide energy efficient and green transport solutions as we continue to believe that climate change will be an important macro-economic theme for the next 20 to 30 years.

*McKinsey is a global management consultancy with influential relationships across a range of industries. Their findings are increasingly being used by policy makers and investors to understand the contribution that these technologies can make to carbon abatement if they are developed on a commercial scale.

http://climatedesk.bymckinsey.com

Changing Insurance
Jupiter's SRI team attended The Chartered Insurance Institute's launch of 'Coping with Climate Change', the Institute's third major study into the effects of climate change for the insurance sector.

The insurance industry is already faced with significant challenges related to climate change, such as the increase in flood risk in the UK.  The need to manage climate change risks has therefore become increasingly pressing for the industry. Like other businesses sectors in the UK, the industry must address two key questions:

1. how to adapt to changing weather patterns and other environmental effects; and
2. what mitigation policies are needed to reduce greenhouse gas emissions

Given the exposure the insurance industry has to the broader economy, it will need to take a proactive and collaborative approach to these challenges to prevent some risks becoming uninsurable and to ensure it takes full advantage of new market opportunities emerging as a result of the changing climate.

http://www.cii.co.uk/app/news/default.aspx?endstem=1&id=913

Australia feels the heat
In the early months of 2009, Australia suffered its worst heat-wave and forest fires for many years. Australia has a hot, dry and variable climate and agriculture is an important part of the economy. Most residential and industrial developments are concentrated on the coast and are vulnerable to rising sea levels and storm surges. As the impacts of climate change look increasingly severe in Australia, access to water has become a critical issue.

In January, Citigroup published a timely report looking at the water challenges that ASX100 Companies (the top 100 Australian listed companies) face. Encouragingly the report finds many companies in the index have already taken measures to manage their water use. In particular, some of the large mining companies are taking steps to shore-up water supplies at their mines by investing in efficient desalination plants. The report also highlights growing investment opportunities for companies providing pipelines, efficient irrigation, desalination and other water management solutions.

NOTE
The views expressed in the above commentary are not necessarily those of the Jupiter group as a whole and should not be interpreted as investment advice. Every effort is made to ensure the accuracy of any information provided but no assurances or warranties are given.